Feeds

Network Associates settles shareholder lawsuit

$30m payment to stock holders hit by accounting changes

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

Network Associates has settled a lawsuit with shareholders who alleged that the security giant pushed up its share price by not accounting for acquisitions properly.

According to Associated Press, the settlement means that 80,000 to 100,000 shareholders who felt they were financially hurt by the practice will receive a settlement of $30 million between them.

The case is interesting because it involves NAI booking the cost of acquisitions as valueless "in-process research and development", a common practice in the 1990s until the Securities and Exchange Commission got tough on the practice in 1998.

In the case of Network Associates, the firm restated its revenues off its own back after it was contacted about the issue by the SEC. This resulted in recorded sales falling from $245.2 million to $25.2 million for the firm's subsequent quarter.

The restatement had an effect on share value which provoked a class action lawsuit by shareholders. In settling their claim Network Associates is not admitting any fault on its part and has said it did so simply to stop "protracted and expensive" litigation. ®

Related stories:
Network Associates misses Q4 targets
Network Associates beaten up on stock marketAccounting rules force Intel chip disclosures

Providing a secure and efficient Helpdesk

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.