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Sunday, May 28, 2023

Judge Green Lights MRV Backdating Settlement

A federal judge gave preliminary approval Monday to a $3 million settlement between MRV Communications Inc. and a group of investors who had accused the telecom of illegally backdating stock options. The settlement was filed with the U.S. District Court for the Central District of California last month and also calls for stricter oversight at the Chatsworth maker of Ethernet and other networking equipment. U.S. District Judge Gary Allen Feess said he will issue a final written ruling later this week. Complainants will receive $2.5 million, while counsel for the shareholders will be paid $500,000. Shareholders in two separate lawsuits accused the company in 2008 of secretly backdating and manipulating more than 1 million options given to its officers and directors, and reporting false financial statements to investors. The two lawsuits were merged into one. The company said it has implemented new rules for its board and stricter financial oversight is in place. A new chief financial officer was brought in, and last month a new chief executive, Barry Gorsun, took over. Shares lost 10 cents, or 1 percent, to close at $10 in over-the-counter trading.

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