Rambus Inc. is a manufacturer of memory chips.
The original Complaint alleges that Rambus and certain officers and directors violated Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 by making false and misleading statements and omissions concerning Rambus' improper and undisclosed practice of backdating options conferred on certain executives which made it appear that such options were issued on dates when the market price of Rambus stock was higher than the actual market price on the actual grant dates. This improper backdating masked the virtually instant profits the option recipients obtained. Under generally accepted accounting principles, these profits were required to be recognized as an expense in the Company's financial statements for the appropriate period, but were not. This backdating of options also violated provisions of the Internal Revenue Code relating to deduction of option payments. Thus, the Company's financial statements in Form 10-K filings for the years 2002, 2003, 2004 and 2005 were materially false and misleading. In addition, the Company's Proxy Statements for annual shareholder meetings held in years 2002 to 2005 were materially false and misleading because they contained statements concealing Rambus' practice of backdating stock options.
On July 21, 2006, the Plaintiffs filed an Amended Complaint. On November 9, 2006, the Court entered the Order by Judge Jeremy Fogel granting the Motion of Ronald L. Schwarcz for appointment of lead Plaintiff and for appointment of lead Plaintiff's Counsel. On February 14, 2007, a Consolidated Amended Class Action Complaint was filed. On April 2, 2007, Rambus and the individual Defendants filed with the Court motions to dismiss the Complaint. On May 7, 2007, Defendant PricewaterhouseCooper filed a motion to dismiss the Complaint. In a press release dated September 7, 2007 Rambus (Nasdaq:RMBS) announced that it has reached a settlement in principle regarding the consolidated securities class action.
According to a press release dated March 13, 2008, Rambus has put to rest a multidistrict securities class action alleging that company executives illegally backdated stock options to the tune of $18.3 million. Judge Jeremy Fogel of the U.S. District Court for the Northern District of California on March 5 granted preliminary approval to a stipulation outlining the settlement, though the order was not docketed until March 12. A final approval hearing was scheduled for May 14. Judge Fogel also preliminarily certified the proposed class, which comprises purchasers of Rambus stock from Dec. 12, 2001, to July 18, 2006, for purposes of the settlement. The stipulation, signed by all parties between Feb. 29 and March 4, describes a deal that releases all Defendants — including Rambus, several board members and executives, and auditor PricewaterhouseCoopers Plc — in exchange for $18 million, prejudgment interest of $333,313 and post-judgment interest.
On May 14, 2008 the Final Order and Judgment of Dismissal was entered, terminating the case. On the same day, the judge granted approval for the allocation of settlement funds and provided attorneys' fees and expenses at $4,583,328.25 (25% of the settlement fund including interest accrued from March 6, 2008), and $282,788.49.
On April 30, 2010 the Court issued an Order Authorizing Payment of Fees and Expenses to Claims Administrator and Disbursement of Net Settlement Fund to Claimants.
