Options backdating scorecard Yerli xxx
class action, and to reflect a revised count of backdating class actions filed to date.4.
At the time this article went to press, three of the eight full settlements had been approved by a court and five were tentative.
On average, class actions involving backdating allegations have settled for less than half the amounts forecast by NERA's settlement prediction model.
As only eight cases have fully settled thus far, the reasons for the low settlements are not yet clear.
While one case, Meade Instruments, Inc., settled for approximately 97% of the amount predicted, the other seven cases each settled for less than 60% of the predicted amount, and in one case (Rambus, Inc.), the actual settlement was only about 8% of the predicted amount.
We conducted a formal test to determine whether a backdating variable, added to NERA's existing predicted settlement model, was statistically significant.Implications Why do shareholder class actions that allege options backdating appear to settle for less than comparable non-backdating cases?One possibility is that shareholder suits with backdating allegations are perceived as weaker on the merits than other class actions. The authors would like to thank Jori Visokomogilska, Stefan Boettrich, and Sheena Siu for research assistance, and David Tabak, Marcia Mayer, Stephanie Lee, Pat Conroy, Raymund Wong, Erik Stettler, Kevin La Croix, and Adam Savettfor valuable comments and suggestions.The estimate implies that, controlling for all the other variables, the settlement in a backdating case is about 46% of the settlement in a non-backdating case with a similar level of investor losses and other characteristics captured by the model.This finding is broadly consistent with the results presented in Table 1.
Settlements also rise with the inclusion in the settlement of each class of security other than common stock (e.g., bonds or options).