Network Associates Inc. on Monday agreed to pay a group of shareholders $70 million to settle some class-action lawsuits against the company.
The settlement, which is still subject to approval by the U.S. District Court for Northern California, resolves suits in which shareholders accused the company of misleading them by booking revenue improperly. The suits, filed in 2000 and 2001, were just part of a messy picture relating to some accounting problems that resulted in the resignation of several top executives as well as ongoing investigations by the Department of Justice and the Securities and Exchange Commission.
The lawsuits were brought by investors who accused NAI of overloading its resellers with inventory in an effort to book more revenue. Under NAIs accounting practices at the time, the company recognized revenue when it shipped products to resellers, instead of when the reseller actually sold the product. NAI has since changed that practice.
Much of the executive team that was in place at the time of the lawsuits, including former CEO Bill Larson and Peter Watkins, the former president, were named in the lawsuits.
Current CEO George Samenuk said in a statement that he was pleased to have the lawsuits done with.
NAI, based in Santa Clara, Calif., is still under investigation by the SEC and Justice Department, however.
The company also said on Monday that it will file its 2002 annual report on Oct. 31. NAI had delayed the filing, along with reports for the first half of this year, as a result of the Justice investigation.
Earlier this year, Terry Davis, a former NAI executive pleaded guilty to securities fraud in connection with the accounting investigations.