Biting the hand that feeds IT
Biting the hand that feeds IT
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Original URL: http://www.theregister.co.uk/2007/10/16/hp_mercury_options_backdating_lawsuit/
HP-owned software maker Mercury is to settle an options backdating class action lawsuit by coughing up a staggering $117.5m.
The firm was previously known as Mercury Interactive before HP bought it for $4.5bn last year.
According to the Financial Times, Mercury will pay the biggest settlement of its kind, dwarfing amounts paid in similar cases in the US.
The firm, which had somewhat ironically provided regulatory compliance software to its users in the past, was accused by the Securities and Exchange Commission (SEC) of share options backdating between 1997 and 2002.
As we reported in May this year (http://www.theregister.co.uk/2007/05/31/brocade_mercury_options/reported), the SEC had accused Mercury's former chief executive Amon Landen, former chief financial officers Sharlene Abrams and Douglas Smith, and former general counsel Susan Skaer of aiding and abetting violations of anti-fraud laws between 1997 and 2005.
Landen quit the firm in 2005 when the share allocation scandal first broke. Mercury's shares were later suspended from the Nasdaq stock market and HP swooped in to buy the harangued company in July 2006.
Mercury had agreed in May to pay $25m to settle its case with the SEC.
At the time of HP's takeover of Mercury, the computer and printer giant's chief executive Mark Hurd said: "We've been thinking about this for a while. It has to be a deal that makes sense. This transaction demonstrates HP is building a software business that is to be reckoned with."
The Mercury case was said to have been agreed in principle but is still awaiting approval from the courts, the outcome of which should see money put "back in the hands of shareholders", reports the FT.
Undoubtedly feeling the sting, HP said yesterday that it had agreed to a settlement, but stayed quiet on providing any further details. ®
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