Huge Legal Fees Paid in Backdating Probes
Companies have spent “untold millions” on legal fees in probes of stock options backdating, American Lawyer reports.
Fees are spent not only on the defense at criminal trials but also on in-house investigations, government negotiations, and defense of civil suits by shareholders, the legal magazine says. Many insurers are refusing to pay, resulting in disputes that are being handled in mediation or arbitration.
Legal fees paid by Brocade Communications Systems Inc., whose ex-CEO was convicted of stock options backdating, could reach $100 million, the magazine says. ABAJournal.com noted yesterday that the company had apparently paid at least $10 million in fees just on the seven-week trial of ex-CEO Greg Reyes.
American Lawyer lists other legal tabs (fines not included) as:
–$72 million, spent by Mercury Interactive Corp.
–$36.8 million, spent by KLA-Tencor Corp.
– $32 million, spent by Monster Worldwide Inc.
– $21 million, spent by CNET Networks Inc.
