Cisco Systems Inc. has agreed to pay nearly $92 million to settle a class- action lawsuit filed against the company and certain current and former directors and officers.
Filed in 2001, the lawsuit charged that the company misled buyers of its stock. The plaintiffs also alleged that defendants named in the suit used insider information to sell Cisco shares.
Cisco denied all allegations in the suit. “Cisco continues to firmly believe that the suit’s claims are without merit, and we have been eager to achieve a victory in this case,” said Mark Chandler, senior vice president and general counsel, in a press release issued by the company. “Given the expense and disruption associated with prolonged litigation, and the fact that this resolution is achieved with no additional cost to Cisco and with the consent of our insurance carriers, we believe this settlement is in the best interest of Cisco and its shareholders.”
Spencer Burkholz — the lead attorney for Lerach, Coughlin, Stoia, Gellar, Rudman and Robbins LLP, the lawyers for the class — said in the press release that although the plaintiffs were not “required to prove securities fraud, there was a lack of insider trading, and Cisco was not required to make a financial restatement. In light of these litigation risks, we are satisfied that this is a fair settlement that returns value to the class members.”
Cisco said the payment will have no effect on its financial position or on the results of its operations since the settlement amount is within applicable insurance limits.