Maxim Integrated Products, Inc. Summary: The original complaint charges that Maxim and certain of its former officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by engaging in improper stock option backdating that caused the issuance of materially false and misleading financial statements during the Class Period.
Specifically, the complaint asserts that on January 17, 2008, the Company announced that it would be restating its financial statements to record between $550 million and $650 million of additional stock-based compensation expense and that its previously issued financial statements could no longer be relied on. As a result of these adverse disclosures, the Company's stock price has declined 22%.
On April 7, 2008, several motions were filed by certain groups and individuals for the appointment of lead plaintiffs and to approve the selection of lead counsels. The judge entered an order on May 15 consolidating all related cases and appointing the Public Funds Group - comprised of the Cobb County Government Employees' Pension Plan, the Dekalb County Pension Plan and the Mississippi Public Employees Retirement System - to be appointed as lead plaintiffs.
Plaintiffs filed their Consolidated Class Action Complaint on November 14, 2008 adding a former managing director and treasurer of Maxim to its defendants list. The defendants responded by filing motions to dismiss the Consolidated Class Action Complaint on January 30, 2009. On July 16, 2009, Judge James Ware granting in part and denying in part Maxim Integrated Products, Inc.’s motion to dismiss and denied the individual defendant’s motion to dismiss. On December 11, 2009, the lead plaintiffs filed a motion to certify the class.
According to a press release dated May 5, 2010, Maxim Integrated Products, Inc. (NASDAQ:MXIM) announced that it has entered into a memorandum of understanding reflecting an agreement in principle to settle all claims asserted against all defendants in the putative class action concerning the Company's stock option accounting practices captioned In re Maxim Integrated Products, Inc. Securities Litigation, Case No. C-08-00832-JW (N.D. Cal.). The agreement in principle provides for the payment of $173 million by the Company. The after-tax cash impact is estimated to be $110 million. The memorandum of understanding contemplates the negotiation and execution of a final settlement agreement, and the settlement is subject to notice to the putative class and final approval by the Court.
On July 13, 2010, the Court entered the Order preliminarily approving the settlement. The Final Approval Hearing was set for September 27, 2010. On September 29, 2010, the Court entered the order approving the plan of allocation and the settlement. The case is now dismissed with prejudice. A hearing will follow regarding the plaintiffs' motion for attorney fees and reimbursement of litigation expenses.
On November 1, 2010, Judge James Ware granted the motion for attorneys' fees and reimbursement of expenses. According to the Order, the Court hereby awards attorney fees of $29,282,243.72 (17% of the $173,000,000 Settlement Fund net of Litigation Expenses), payable to Lead Counsel. The Court also grants Lead Counsel’s request for reimbursement of litigation expenses in the amount of $706,337.54.
On December 1, 2010, a Notice of Appeal was filed as to the Order on the motion for attorney fees. The appeal was dismissed by the appellants by the Mandate entered on January 5, 2011.
SIC Code: 3674
WARNING AND DISCLAIMER OF LIABILITY:
The information included on this Web site, whether provided by personnel employed by Stanford Law School or by third parties, is provided for research and teaching purposes only. Neither Stanford University, Stanford Law School, nor any of their employees, agents, contractors, or affiliates warrant the accuracy or completeness of the information or analyses displayed herein, and we caution all readers that inclusion of any information on this site does not constitute an endorsement of the truthfulness or accuracy of that information. In particular, this Web site contains complaints and other documents filed in federal and state courts, which make allegations that may or may not be accurate. No reader should, on the basis of information contained in or referenced by this Web site, assume that any of these allegations are truthful.
Go to Search page | Go to Case Index page | Back to Top