In re Marvell Technology, Group, Ltd. Securities Litigation, Master File No. 06-06286 RWM (S.D. Cal. 2006)

Barroway Topaz served as Co-Lead Counsel in this securities class action brought against Marvell Technology Group Ltd. (“Marvell”) and three of Marvell’s executive officers.  This case centered around an alleged options backdating scheme carried out by defendants from June 2000 through June 2006, which enabled Marvell’s executives and employees to receive options with favorable option exercise prices chosen with the benefit of hindsight, in direct violation of Marvell’s stock option plan, as well as to avoid recording hundreds of millions of dollars in compensation expenses on the Marvell’s books.  Specifically, plaintiffs alleged that defendants misled investors by making materially false and misleading statements and omissions regarding the terms of Marvell’s option grants and compliance with its stock option plan; the expenses associated with the backdated option grants and related financial figures; and the strength of Marvell’s internal controls.  Defendants’ alleged conduct ultimately resulted in the restatement of certain of Marvell’s financials.  In total, the restatement conceded that Marvell had understated the cumulative effect of its compensation expense by $327.3 million, and overstated net income by $309.4 million, for the period covered by the restatement. 

Following nearly three years of investigation and prosecution of the Class’ claims as well as a protracted and contentious mediation process, Co-Lead Counsel secured a settlement for $72 million from defendants on June 9, 2009.  This Settlement represents a substantial portion of the Class’ maximum provable damages, and is among the largest settlements, in total dollar amount, reached in an option backdating securities class action.  The Settlement obtained preliminary approval by the Court on July 31, 2009 and will be presented to the Court for final approval on November 6, 2009.