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HP’s Mercury settles over options scandal
Hefty $117.5m to resolve case
HP-owned
software maker Mercury is to settle an options backdating class action
lawsuit by coughing up a staggering $117.5m.The firm was previously
known as Mercury Interactive before HP bought it for $4.5bn last
year.According to the Financial Times, Mercury will pay the biggest
settlement of its kind, dwarfing amounts paid in similar cases in the
US.The firm, which had somewhat ironically provided regulatory
compliance software to its users in the past, was accused by the
Securities and Exchange Commission (SEC) of share options backdating
between 1997 and 2002.As we reported in May this year, the SEC had
accused Mercury’s former chief executive Amon Landen, former chief
financial officers Sharlene Abrams and Douglas Smith, and former
general counsel Susan Skaer of aiding and abetting violations of
anti-fraud laws between 1997 and 2005.Landen quit the firm in 2005 when
the share allocation scandal first broke. Mercury’s shares were later
suspended from the Nasdaq stock market and HP swooped in to buy the
harangued company in July 2006.Mercury had agreed in May to pay
$25m to settle its case with the SEC.At the time of HP’s takeover of
Mercury, the computer and printer giant’s chief executive Mark Hurd
said: “We’ve been thinking about this for a while. It has to be a deal
that makes sense. This transaction demonstrates HP is building a
software business that is to be reckoned with.”The Mercury case was
said to have been agreed in principle but is still awaiting approval
from the courts, the outcome of which should see money put “back in the
hands of shareholders”, reports the FT.Undoubtedly feeling the sting,
HP said yesterday that it had agreed to a settlement, but stayed quiet
on providing any further details.
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