Cisco Settles Class Action Lawsuit; Insurers Will Pay $91.75M
Posted August 21, 2006 7:57 a.m. EDT
SAN JOSE, CA. — Cisco Systems
has agreed to settle a class action lawsuit dating to 2001.
Insurers for Cisco will pay the $91.75 million settlement to plaintiffs in the consolidated action.
"Cisco continues to firmly believe that the suit's claims are without merit, and we have been eager to achieve a victory in this case, said Mark Chandler, Cisco's general counsel. "Given the expense and disruption associated with prolonged litigation and the fact that this resolution is achieved with no additional cost to Cisco and with the consent of our insurance carriers, we believe this settlement is in the best interest of Cisco and its shareholders."
Cisco had denied allegations of insider trading and issuing of misleading statements or omitted statements of material fact.
"We provided a service to Cisco's shareholders by bringing this action and conducting exhaustive discovery into the company's performance in 2000-2001," said Spencer Burkholz, lead lawyer for Lerach, Coughlin, Stoia, Gellar, Rudman and Robbins LLP, on behalf of those suing Cisco. The statement was issued by Cisco.
"Clearly, industry and macroeconomic conditions had a dramatic impact on Cisco's stock price, which reduced potential damages," he added. "Though not required to prove securities fraud, there was a lack of insider trading, and Cisco was not required to make a financial restatement. In light of these litigation risks, we are satisfied that this is a fair settlement that returns value to the class members."
Purchasers of Cisco common stock between Nov. 10, 1999, and Feb. 6, 2001, are eligible to receive proceeds from the settlement if they "timely file valid proofs of claim", Cisco said. Settlement procedures will be implemented by the United States District Court for the Northern District of California, where the suit was heard.