Judge Fogel noted that The thrust of the allegation is that the recipients of the backdated options were overpaid, in violation of Apple’s stock option plans.Such allegations necessarily involve an injury to the corporation in that overpayment entails a reduction in corporate assets….Mc Kelvey to dismiss the options backdating-related securities class action lawsuit pending against him.(The decision apparently relates only to Mc Kelvey and not to other defendants in the case, which include the company itself.) According to news reports (here), the court’s opinion explaining the denial. In any event, I have added the Apple, Flir Systems and Monster dispositions to my list of options backdating-related lawsuit dismissals, denials and settlements, which can be accessed here.According to news reports (here), on September 8, 2008, Judge Jeremy Fogel of the Northern District of California preliminarily approved the settlement of the Apple options backdating derivative litigation.
The practice of issuing opinions, particularly on matters of great interest and obvious significance for similar pending matters, as “not for citation” is inconsistent with our common law traditions and notions of public justice and rightly deserves the strongest disapprobation.
Reportedly, however, a separate options backdating derivative suit remains pending.
In addition, on November 14, 2007, the federal court in Manhattan denied the motion of Monster Worldwide founder Andrew J.
Judge Fogel noted that in order to establish this claim the plaintiff must plead “both economic loss and loss causation.” Because Apple’s stock price did not decline on the news of options backdating, the plaintiff bases its economic harm argument on the purported dilution to the shareholders’ interests from the issuance of backdated options.
Judge Fogel noted that dilution is not necessarily accompanied by economic loss, because share prices might rise on the news of retention of a key executive upon issuance of options.