|  | | 2008 News and Press Releases | | |
HEADLINE NEWS:
SEC Rebuffed In Backdating Case
Bailey Somers
Securities Law 360. May 9, 2008
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EXCERPT: A former executive of both KLA-Tencor Corp. and Juniper Networks Inc. has scored a victory in her battle with the U.S. Securities and Exchange Commission over allegations that she engaged in illegal stock options practices, after a U.S. District Court granted in part her motion to dismiss the case. On May 7, Judge Ronald Whyte of the U.S. District Court for the Northern District of California granted in part and denied in part a motion to dismiss filed by Lisa C. Berry, a former vice president and general counsel of KLA-Tencor and a former general counsel of Juniper Networks. The SEC had accused Berry of masterminding the stock options backdating schemes eventually implemented at both KLA-Tencor and Juniper. But in his ruling, Judge Whyte dismissed the SEC's claims with respect to Berry's conduct at KLA-Tencor on the grounds that they demanded civil penalties for conduct occurring more than five years before the filing of the complaint. Judge Whyte also agreed to dismiss some of the securities fraud claims regarding alleged material misstatements and also granted the motion as to several negligent misrepresentation claims. Berry had asked the court to toss any claims arising from conduct before August 2002, since the federal statute of limitations imposes a five-year window on civil enforcement proceedings. “Berry argues that the SEC's requested relief is punitive and therefore subject to the five-year period,” the judge said in his ruling. “The SEC argues that it seeks equitable relief, not punitive relief, and therefore the repose period does not apply.” Judge Whyte ultimately barred the pre-2002 claims, which removes the bulk of the allegations that involve KLA-Tencor. Berry also claimed that despite the SEC's allegations, she did not make any false statements and thus did not commit securities fraud. |
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