More Backdating Scrutiny for Wilson Sonsini
A federal judge in San Jose, Calif., has refused to approve settlements in two backdating cases without more information about the role of corporate lawyers, including Wilson Sonsini Goodrich & Rosati.
In one derivative suit involving Integrated Silicon Solution Inc., U.S. District Judge Ronald Whyte said he wanted to know whether Wilson Sonsini advised the company when it backdated stock options, the Daily Journal reports (sub. req.). He asked in an order whether such prior advice would raise a conflict of interest in advising the company on a settlement that protected the company’s lawyers.
In a second derivative case involving Sigma Designs Inc., Whyte wanted to know why no claims were made against the lawyers representing the company, the story says. He didn’t specify whether he was referring to Wilson Sonsini, which had served as the company’s outside counsel, or the company’s in-house lawyer.
Whyte’s order directed Sigma’s law firm, Pillsbury Winthrop Shaw Pittman, to submit a declaration explaining why it found no basis for a claim against the company’s lawyers.
In a separate case, Wilson Sonsini paid $9.5 million to Brocade Communications to defray the costs of backdating litigation, a payment that may have helped the firm avoid being named in a derivative backdating suit against the company.
