Network Associates in $70M Settlement
Internet security specialist Network Associates on Tuesday announced it would pay $70 million to settle a slew of class action lawsuits alleging stock price inflation.
The Santa Clara, Calif.-based firm, which markets anti-virus and network management software, has entered into an agreement to settle the pending class action suits filed in 2001 and alleging that Network Associates made "positive but false statements about current business and future prospects throughout the second half of 2000."
The settlement, which is subject to court approval, calls for Network Shareholders to be paid $70 million.
Network Associates CEO George Samenuk described the settlement deal as an opportunity for the company move past the accounting controversy that erupted last year and led to the departure of chief executive Bill Larson.
At that time, the company was accused of "channel stuffing" - overselling to its distributors to pad short-term results. After an internal audit, Network Associates agreed to change its accounting practices but the Securities and Exchange Commission (SEC) is still conducting an investigation into the company's operations.
