A lawsuit has been filed and is seeking class action status against the semiconductor-production-equipment company alleging Chief Executive Richard Hill and other insiders enriched themselves through manipulations known as backdating, spring loading, and bullet-dodging. The derivative lawsuit was filed in San Jose federal court and claims Novellus senior executives and directors employed a variety of illegal and undisclosed tactics to maximize personal gain. Hill and 13 other past and present officers and directors are named as defendants.
Statistical evidence from 1997 to 2002 asserts that Novellus insiders reaped an annualized return of 425% on options, while typical stockholders earned 28%. In 2000, Novellus insiders earned 503% returns, while typical shareholders actually lost 13%. The lawsuit accuses the company's management of using various methods to enhance the value of options for insiders.
