Judge Refuses to Approve Settlement Proposal in Backdating Case
A federal judge has refused to accept a proposed settlement in an options backdating suit.
U.S. District Judge James Ware refused to dismiss a derivative suit at the request of KLA-Tencor Corp. earlier this month, citing concerns about the independence of a member of the board of directors’ special litigation committee that investigated backdating, the National Law Journal reports. He also criticized the proposed settlement with a few former executives as too small.
Ware said the board member, Stephen P. Kaufman, may have been on the board and audit committee at the same time that backdating was occurring, the story says.
“Although this does not indicate that Kaufman committed any affirmative wrongdoing in his roles at KLA during this period, it does raise the possibility that Kaufman was tasked with investigating corporate malfeasance that he had previously, if unintentionally, approved,” Ware said.
