New York, NY: (Jan-24-08) A shareholders class action lawsuit was brought against KLA-Tencor Corporation, alleging that the company engaged in backdating stock option grants. The lawsuit, which was brought in US District Court for the Northern District of California, claimed that the company backdated stock option grants to individual defendants and other directors or executives to provide the recipients with a more profitable exercise price. Backdating stock option grants is illegal and a violation of federal securities laws. Other allegations included that KLA-Tencor improperly understated its expenses and overstated its earnings as a result of improper option backdating and it failed to prepare its financial statements in accordance with Generally Accepted Accounting Principles.
Though the company denied any wrongdoing, KLA-Tencor agreed to enter into a settlement agreement to resolve the dispute. Under the settlement, the company will pay $65 million. Records show that co-lead plaintiffs in the case included the Police and Fire Retirement System for the City of Detroit and the City of Philadelphia Board of Pensions and Retirement. The class includes investors who purchased KLA-Tencor securities from June 30, 2001 through and including January 29, 2007. [
