There is still a raft of unresolved options backdating cases out there, but at least one of the remaining options backdating related securities class action lawsuits has now been settled.
On June 9, 2009, Marvell Technology announced (here) that it has reached an agreement to settle the case for a payment to the class of million.
Nine have been dismissed and eighteen have been settled. A complete list of the options backdating lawsuits can be found here.
According to the Securities Litigation Watch "Options Backdating Scorecard" (here), the average options backdating class action settlement (including the Marvell settlement) .5 million, but if the 5 million United Health Group settlement is excluded, the average settlement (again including the recent Marvell settlement) .71 million, which suggests that the Marvell settlement was well above the prior adjusted average options backdating securities class action lawsuit settlement.
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Once the decision to exercise is made, insiders who plan to hold the acquired shares have an unambiguous personal tax-based incentive to exercise on the day with the lowest possible stock price.
Finally, we find that suspect exercise-and-hold transactions are more likely in firms with a higher likelihood of stock option grant backdating.