Software maker Mercury Interactive has agreed to pay $117.5 million to settle an investor lawsuit over the company's stock options award practices, a lawyer for the plaintiffs said Monday.
The settlement with Mercury, now owned by Hewlett-Packard, is believed to be the biggest in any stock options backdating case to date, said Joel Bernstein, an attorney at law firm Labaton Sucharow who represents investors in the lawsuit.
Many investor lawsuits have resulted from the options scandal in corporate America, in which more than 180 companies have been investigated by authorities or have conducted internal inquiries into whether they manipulated grants to make them more valuable for top executives.
In one legal settlement last month, Rambus agreed to pay $18 million to resolve an investor lawsuit related to its accounting for option grants.
The Mercury settlement, which was reached in principle among the parties but is still subject to court approval, would resolve a lawsuit filed in August 2005.
HP said in a statement that it had agreed to a settlement but did not provide details.
In May, Mercury agreed to pay a $28 million civil penalty to settle regulatory accusations of options backdating. The U.S. Securities and Exchange Commission had accused the company and four former top executives of scheming from 1997 to 2005 to award themselves undisclosed compensation by manipulating options grants and falsifying documents.
The shareholder litigation, which had sought class action status, was dismissed in August by U.S. District Judge Jeremy Fogel in San Jose, Calif., who ruled that the claims were inadequately stated. The judge said at the time, however, that the plaintiffs could refile an amended version of the lawsuit.
The settlement was reached in mediation, before a new version of the suit could be filed, Bernstein said.
"We are satisfied that the parties have come to such a fair settlement and are confident that the award will provide fair recompense to the investors who lost money as a result of Mercury's improper practices," Bernstein said in a statement.
