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Brocade: Institutional investors force higher settlement price

Represented the Erie County Employees’ Retirement System, in a derivative action alleging that, between 2000 and 2004, Brocade and certain officers and directors backdated stock option grants to top executives, and falsified the dates of stock option grants and other information regarding option grants to employees. 

As a result, Brocade was forced to restate all of its financial statements from 2000 through 2005. After the class was certified, we represented two public pension fund class representatives in objecting to a proposed settlement. Our clients claimed that the other plaintiffs had failed to conduct discovery before agreeing to the settlement; and that the representation of both the company and its individual defendants by the same law firm had created an incurable conflict of interest. The court agreed and the case ultimately settled for $160 million, far more than the initial proposed settlement amount.