Rambus Settles Backdating Suit
Rambus Inc. will pay US$18 million to settle a class-action lawsuit over stock-option accounting.
The suit was filed last year on behalf of shareholders after the audit committee of Rambus's board of directors found that the company had improperly accounted for stock-option grants. Under the settlement, which still needs court approval, all claims against all defendants in the case would be dismissed, according to the company.
The audit committee found that option grants to employees had been misdated and the company had improperly accounted for those grants. Rambus had to restate results for 2003 through 2005 and the first quarter 2006 as a result of the investigation. Rambus, in Los Altos, California, makes memory technology.
Last month, Rambus settled its own suits against all but one former executive for more than $6.5 million. As part of that deal, claims were dropped against all the former executives except Ed Larsen, former vice president of human resources and senior vice president of administration, who worked for the company from 1996 to 2004.
Rambus was one of scores of technology companies, including Apple Inc., McAfee Inc. and Broadcom Corp., that have been embroiled in controversy surrounding accounting for backdated stock options. Many companies used backdating to try to give new employees a greater windfall when they exercised their options.