San Jose, CA: (Oct-11-07) A class action lawsuit was brought against Vitesse Semiconductor Corp., alleging that the company engaged in stock option backdating and accounting manipulations. The suit, filed in April 2006, reached a settlement in which the company agreed to pay $10.2 million to a settlement fund. Sources stated that $8.75 million to be paid by Vitesse's directors' and officers' liability insurers and a total of $1.45 million to be paid by Louis Tomasetta and Eugene Hovanec, two of the former executives of Vitesse. The two former executives also will contribute all shares of Vitesse common stock that they own, totaling 1,272,669 shares.
Additionally, Vitesse will contribute 2,650,000 shares of Vitesse common stock and no cash to the class fund. Vitesse officials claimed that the company will retain the right to continue its state court action against KPMG, its former auditing firm. Vitesse will also contribute 4,900,000 shares of Vitesse common stock to cover the attorneys' fees and expenses of the derivative plaintiffs' counsel, and has agreed to adopt certain corporate governance measures. [EE TIMES: VITESSE SHAREHOLDERS]
