In re Mercury Interactive Securities Litigation
As co-lead counsel, we secured a total sum of $117.5 million, at the time one of the largest settlements in a stock options backdating litigation.
In In re Mercury Interactive Corp. Securities Litigation, Master File No. 05-3395 (N.D. Ca.), Labaton Sucharow is co-lead counsel representing lead plaintiffs the Steamship Trade Association/International Longshoremen's Association Pension Fund, the City of Sterling Heights General Employees Retirement System, the City of Dearborn Heights Police and Fire Retirement System, and the Charter Township of Clinton Police & Fire Pension System. The allegations in Mercury concern backdated option grants used as unreported compensation to employees and officers of the Company. Mercury's former CEO, CFO, and General Counsel actively participated in and benefited from the options backdating scheme, which came at the expense of Mercury shareholders and the investing public.
On July 3, 2006, Mercury filed an amended Form 10-K/A with the Securities and Exchange Commission ("SEC"), restating its financial statements for 2002, 2003 and 2004, and disclosing that options backdating occurred on at least fifty-four separate occasions. Labaton Sucharow filed a Consolidated Amended Complaint in this matter on September 8, 2006. On May 31, 2007, after a formal investigation into Mercury's options backdating scheme, the SEC also filed a complaint against the company and a number of its former officers alleging violations of federal securities laws.
Following extensive motion practice in late 2006 and early 2007, Labaton Sucharow entered into negotiations with Hewlett-Packard as successor-in-interest to Mercury (following a late 2006 merger). Along with the other defendants to the action, Labaton Sucharow and Hewlett-Packard's counsel reached an agreement in principle that will compensate injured plaintiffs in the total sum of $117.5 million, a figure representing one of the largest known settlements or judgments in an options backdating suit. Labaton Sucharow and Hewlett-Packard's counsel executed a Stipulation of Settlement and the Court granted preliminary approval of the settlement on June 2, 2008. On September 25, 2008, the Court granted final approval of the settlement. The settlement is currently being distributed to Authorized Claimants.