Brooks Automation, Inc. - Securities Class Action

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Copyright (c) 2001
Stanford Law School

Brooks Automation, Inc. Summary: According to a press release dated June 24, 2008, Brooks Automation, Inc. (Nasdaq:BRKS) announced that it has reached a settlement in principle regarding the consolidated securities class action filed in June 2006 pertaining to the Company's historical stock option granting practices and related accounting. The terms of the settlement, which include no admission of liability or wrong doing by Brooks, provide for a full and complete release of all claims in the litigation and a payment of $7.75 million to be paid into a settlement fund, pending final documentation and approval by the Court of a plan of distribution. There will be no earnings or cash effect of this settlement as the $7.75 million will be paid by the Company's liability insurers. Once approved, the settlement will provide a full release of Brooks and the other named defendants in connection with the allegations raised in the class action, and it will resolve all class action litigation pending against the Company and against present and former officers and directors of the Company.

In a press release dated November 8, 2007, taking into account investigations recently launched by the U.S. Securities and Exchange Commission and the U.S. Department of Justice into semiconductor maker Brooks Automation Inc., a district court judge refused to throw out a class action options backdating suit filed against the company. In a decision handed down on Nov. 6, Judge Rya W. Zobel of the U.S. District Court for the District of Massachusetts kept alive the options backdating allegations levied against Brooks, despite tossing a handful claims made against individuals and approving a motion to dismiss filed by PricewaterhouseCoopers LLP.

Related cases were ordered consolidated and lead plaintiffs filed a Consolidated Complaint on February 12, 2007. Defendants moved to dismiss the complaint on April 9, 2007.

The original complaint alleges that during the Class Period, defendants Brooks Automation, Inc. and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Sections 11, 12 and 15 of the Securities Act of 1933 by publicly issuing a series of false and misleading statements regarding the Company's business and financial results, thus causing Brooks's shares to trade at artificially inflated prices.

In particular, the Complaint alleges that on March 18, 2006, The Wall Street Journal published a story titled "The Perfect Payday - Some CEOs reap millions by landing stock options when they are most valuable; Luck - or something else?" that identified Brooks as one of several companies "with wildly improbable option-grant patterns." On April 26, 2006, Brooks disclosed that its Board of Directors created a special committee to conduct an internal review of matters related to past stock option grants, including the timing of such grants and associated documentation.

The Complaint further alleges that on May 11, 2006, Brooks issued a press release titled "Brooks Automation to Restate Past Periods Related to Certain Stock Option Grants," that stated, in part, that "the Company will be required to correct certain SEC filings, including particularly its financial statements contained in filings for some or all of the periods commencing in fiscal 1999 and ending in fiscal 2005." Brooks further stated that "[t]he Company believes that it accounted for certain matters concerning stock options incorrectly, and as a result recognized less compensation expense than it should have in periods prior to fiscal 2006." On May 18, 2006, two individuals reportedly resigned from the Company's Board of Directors.

The Complaint also alleges that the Securities and Exchange Commission is conducting an informal inquiry concerning stock option grant practices to determine whether violations of the federal securities laws have occurred and Brooks has allegedly received a grand jury document subpoena from the U.S. Attorney for the Eastern District of New York requesting records pertaining to the granting of stock options.

The Complaint further alleges that during the Class Period, certain Company insiders sold approximately 320,000 Brooks shares at artificially inflates prices for proceeds of approximately $6.4 million.

The complaint alleges that, as a result of the Company's recent disclosures, that since March 20, 2006, the first trading day after the above-noted Wall Street Journal article of March 18, 2006, shares of Brooks have declined from $13.88 per share at the opening of trading on March 20, 2006, to close at $12 per share at the close of trading on May 23, 2006, a decline of $1.88 per share, or approximately 14%.

INDUSTRY CLASSIFICATION:
SIC Code: 3559
Sector: Technology
Industry: Semiconductors

COMPANY/ISSUER NAME:	Brooks Automation, Inc.
COMPANY/ISSUER TICKER:	BRKS
COMPANY WEBSITE:	http://www.brooks.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Charles E. G. Leech Sr., et al. v. Brooks Automation, Inc., et al.

COURT: D. Massachusetts	DOCKET NUMBER: 06-CV-11068
JUDGE NAME: Hon. Rya W. Zobel
DATE FILED: 6/19/2006	SOURCE: Notice of Filing
CLASS PERIOD START: 7/25/2001	CLASS PERIOD END: 5/22/2006
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Berman DeValerio Pease Tabacco Burt & Pucillo (MA) One Liberty Square, Boston, MA, 02109 (voice) 617.542.8300, (fax) , Graham & Albano 100 Russell St. P.O. Box 377, Hadley, MA, 01035 (voice) 413.586.5055, (fax) 413.532.0636, Kaplan Fox & Kilsheimer, LLP (New York, NY) 805 Third Avenue, 22nd Floor, New York, NY, 10022 (voice) 212.687.1980, (fax) 212.687.7714, info@kaplanfox.com Lieff, Cabraser, Heimann & Bernstein LLP Embarcadero Center West 275 Battery Street, Suite 3000, San Francisco, CA, 94111-3339 (voice) 415.956.1000, (fax) 415.956.1008, Lockridge, Grindal, Nauen P.L.L.P. Suite 301, 660 Pennsylvania Avenue Southeast, Washington, DC, 20003-4335 (voice) 202.544.9840, (fax) 202.544.9850, Mager & Goldstein LLP 2825 University Drive, Suite 350, Coral Springs, FL, 33065 (voice) 866-274-8258, (fax) 954-341-0855, jgoldstein@mwg-law.com Shapiro Haber & Urmy LLP 75 State Street, Boston, MA, 02109 (voice) 617.439.3939, (fax) 617.439.0134, info@shulaw.com Zimmerman Reed, PLLP 651 Nicollet Mall, Suite 501, Minneapolis, MN, 55402 (voice) 612.341.0400 , (fax) 612.341.0844, info@zimmreed.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 8

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint
Type: Complaint		Date on the document: 06/19/2006
U.S. District Court Civil Docket
Type: Docket		Date on the document: 11/10/2006
Memorandum of Decision
Type: Memorandum		Date on the document: 12/13/2006

REFERENCE COMPLAINT

In Re: Brooks Automation, Inc. Securities Litigation

COURT: D. Massachusetts	DOCKET NUMBER: 06-CV-11068
JUDGE NAME: Hon. Rya W. Zobel
DATE FILED: 11/30/2007	SOURCE: Docket
CLASS PERIOD START: 7/25/2001	CLASS PERIOD END: 5/22/2006
TYPE OF COMPLAINT: Second Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Kaplan Fox & Kilsheimer, LLP (New York, NY) 805 Third Avenue, 22nd Floor, New York, NY, 10022 (voice) 212.687.1980, (fax) 212.687.7714, info@kaplanfox.com Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY) One Pennsylvania Plaza, New York, NY, 10119-1065 (voice) 212.594.5300, (fax) , _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Amended Class Action Complaint Demand For Jury Trial
Type: Complaint		Date on the document: 2/9/2007
Memorandum Of Decision And Order
Type: Order		Date on the document: 11/6/2007
Second Amended Consolidated Class Action Complaint
Type: Complaint		Date on the document: 11/30/2007
Stipulation And Agreement Of Settlement Between All Parties
Type: Settlement		Date on the document: 6/24/2008
U.S. District Court Civil Docket
Type: Docket		Date on the document: 6/24/2008

OTHER DOCUMENTS
Verified Shareholder's Derivative Complaint
Case Name and/or Number: Mark Collins, et al. v. Brooks Automation, Inc., et al.
Type: Complaint		Date on the document: 05/30/2006
Class Action Complaint
Case Name and/or Number: James R. Shaw, et al. v. Brooks Automation, Inc., et al.
Type: Complaint		Date on the document: 07/19/2006

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