Feeds

NAI offers $70m to settle class action suit

Shadow of SEC probe lingers

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

Network Associates (NAI) yesterday announced an offer to pay $70 million to settle a class action brought by shareholders who allege the company used improperly booked revenues to ramp up its share price.

According to the lawsuit the IT security firm misled investors during the late 1990s by recording software sales when technology was shipped to distributors instead of when users actually bought product, a practice known as channel stuffing.

The action was brought to light by a PwC audit in late 2000, after which NAI was forced to restate its results. This triggered the class action lawsuit and coincided with the departure from NAI of flamboyant former chairman and CEO Bill 'Liberace' Larson, former president Peter Watkins and former CFO Prabhat Goyal, each of whom was named in the class action suit.

NAI's current management is keen to draw a line under the affair, hence the proposed $70 million settlement.

"This settlement represents a significant milestone in Network Associates' move from past issues to future opportunities," said NAI's current chairman and CEO, George Samenuk.

NAI's proposed settlement is subject to agreement by the parties to the lawsuit and court approval.

Aside from the class action lawsuit, NAI is still under investigation by the Justice Department and the Securities and Exchange Commission regarding the way it historically booked revenue from its distribution partners.

The Company announced in March last year that it would restate its 1998, 1999 and 2000 financial statements to reflect revenue on sales to distributors on a sell-through basis, which is how the company has reported sales to distributors since January of 2001. At the time it also announced a decision to delay filling its financial results for 2002.

NAI yesterday said it expects to be able to file its results for 2002 and the first half of 2003 with the SEC by the end of October this year. ®

Related Stories

NAI faces SEC probe
Network Associates settles shareholder lawsuit (about booking the cost of acquisitions

New hybrid storage solutions

More from The Register

next story
Apple Pay is a tidy payday for Apple with 0.15% cut, sources say
Cupertino slurps 15 cents from every $100 purchase
Google recommends pronounceable passwords
Super Chrome goes into battle with Mr Mxyzptlk
Infosec geniuses hack a Canon PRINTER and install DOOM
Internet of Stuff securo-cockups strike yet again
Reddit wipes clean leaked celeb nudie pics, tells users to zip it
Now we've had all THAT TRAFFIC, we 'deplore' this theft
YouTube, Amazon and Yahoo! caught in malvertising mess
Cisco says 'Kyle and Stan' attack is spreading through compromised ad networks
TorrentLocker unpicked: Crypto coding shocker defeats extortionists
Lousy XOR opens door into which victims can shove a foot
Greater dev access to iOS 8 will put us AT RISK from HACKERS
Knocking holes in Apple's walled garden could backfire, says securo-chap
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
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.