By Graeme Wearden, 21 August 2006 08:35
NEWS
Cisco has settled a class action suit brought by shareholders who claimed the company had misled its investors.
The networking giant announced on Friday it would pay $91.75m to settle the case, which was filed back in 2001.
Mark Chandler, senior vice president and general counsel for Cisco Systems, said in a statement: "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."
He added: "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."
In the lawsuit, Cisco shareholders claimed senior executives had acted on insider information when they sold almost $600m of stock in the company before its share price tumbled in 2001 on disappointing financial results.
Spencer Burkholz, lead lawyer for Lerach, Coughlin, Stoia, Geller, Rudman and Robbins LLP, counsel for the class, said: "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."
Cisco said on Friday the payout, which will be settled by its insurers, will have no impact on its financial position or results of operations.
Graeme Wearden writes for ZDNet UK
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