Brocade Settles $167M Lawsuit

By Greg McNevin

June 4, 2008: Brocade has agreed to pay US$160 (AU$167) million to settle a federal securities class-action lawsuit, launched in response to it’s restatement of certain financial results in 2005.

Originally filed in May 2005, the lawsuit against the Company and certain former directors and officers was launched in the wake of a stock-options backdating scandal, which the company is happy to finally see the back of.

Under the terms of the preliminary settlement, Brocade will pay $167 million to the plaintiff class in exchange for the dismissal with prejudice of all claims against all defendants.

“Brocade believes that this settlement is in the best interest of its shareholders and the Company as it significantly reduces the uncertainty associated with this ongoing litigation,” said the company in a written statement.

“Further, this resolution enables the Company to put the class action behind it and continue to focus on the business of developing and delivering industry-leading data centre solutions for its customers worldwide.”

 The allegations saw the conviction of former chief executive Gregory Reyes, and Brocade was to be held financially liable to Reyes conduct according to a ruling on May 13.

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