UTStarcom, Inc. Summary: The original Complaint alleges that, throughout the Class Period, Defendants misrepresented and omitted material facts concerning the Company's backdating of stock option grants to its officers and executives. Specifically, Plaintiff alleges that at all times during the Class Period, UTStarcom represented that the exercise price of all stock options would be no less than the fair market value of the Company's common stock, measured by the publicly traded closing price for UTStarcom stock on the day of the grant.
However, in reality, options granted in 2002 were backdated so their exercise price correlated to a day on or near the day UTStarcom's stock hit a significantly low price for the year, or directly in advance of sharp increases in the price of UTStarcom stock.
The complaint further alleges that the truth regarding the Company's option granting practices was revealed on July 24, 2007. On that date, UTStarcom announced that a review of the Company's historical stock option grant practices uncovered evidence that stock option grants were backdated. As a result of these findings, the Company further announced that its previously issued financial statements for the years 2000 through 2006 should no longer be relied upon, and would be restated by at least $28 million. In response to this news, UTStarcom's share price fell 22%, from a close of $4.73 on July 23, 2007 to a close of $3.70 on July 25, 2007. The share price continued to decline thereafter.
On December 18, 2007, the Court granted James R. Bartholomew's motion to be appointed lead plaintiff. The Court also granted his motion to appoint Finkelstein Thompson LLP as lead counsel. On January 25, 2008, an Amended Complaint was filed and the defendants responded by filing a motion to dismiss the Amended Complaint. On April 14, 2008, the Court granted the defendants’ motion to dismiss the Amended Complaint with leave to amend. On May 16, 2008, the plaintiff filed a Second Amended Class Action Complaint, and the defendants again responded by filing a motion to dismiss the Second Amended Class Action Complaint on June 6, 2008. On August 21, 2008, the Court granted in part and denied in part defendants’ motion to dismiss plaintiff’s complaint. On November 17, 2008, one defendant filed a motion to dismiss the Plaintiff's Second Amended Complaint, which was later denied by the Court Order dated February 2, 2009.
On March 16, 2009, the plaintiff filed a motion to certify the class. On May 14, 2009, the plaintiff filed a motion for preliminary approval of the settlement. Based on a thorough understanding of the facts and the law, the parties agreed to the proposed Settlement which consists of $9,500,000 in cash. On June 1, 2009, Judge Illston granted the motion for preliminary approval of the class settlement.
On September 29, 2009, Judgment was entered. The settlement was approved and the action was dismissed with prejudice. On October 30, 2009, Judge Illston granted the motion for attorney's fees and expenses. On November 8, 2010, Judge Illston signed the order authorizing the distribution of the settlement funds.
SIC Code: 3669
Industry: Communications Services
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