Marvell to pay $72 million to settle option backdating lawsuit

marvell_logoMarvell Technology, the Bermuda-based chip company that operates out of Santa Clara, said today that it has agreed to resolve a shareholder class action lawsuit filed in August 2007 related to the way the company granted stock options in the past.

The company will pay $72 million and has decided to throw the charge retroactively into it results for its fiscal 2010 first quarter ended May 2, deepening its net loss to $111.5 million for the quarter.

Last year the company and its then chief operating officer–and the only member of its stock option “committee” during the period in question–Weili Dai, paid fines to the Securities and Exchange Commission over charges of false financial information to investors by improperly backdating stock option grants to employees, totaling $10 million and $500,000 respectively.

(In an question-and-answer feature last month with Mercury News reporter Steve Johnson, Dai declined to discuss the backdating case.)

The settlement of the class action suit is subject to preliminary and then, following notice to class members, final approval by the United States District Court for the Northern District of California.

Bay Area News Group blog editor (1221 Posts)