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The Center for Class Action Fairness would love to object to such a blatantly illegal settlement.
But it can't do so in a vacuum: it can only do so on behalf of a class member who is being ripped off by these attorneys.
The goal behind such option practices is to boost the recipient's potential windfall.
Given the suspect nature of grants of this type, it is not at all surprising that the stock option backdating scandal of 2006 continues to thrive well into 2007.
Given that the class attorneys are negotiating money for third parties instead of their own putative clients (for their own benefit, no less), there is also a breach of fiduciary duty that raises questions whether the class attorneys meet the Rule 23(a)(4) standard.
The settlement is further problematic in that the vast majority of class members are entitled to zero compensation; it is far from clear that the sole lead plaintiff is a member of this subclass.
It dominated the business press in 20, right when the financial world was crumbling.
The companies were awarding the options later but then marking the awards to earlier dates, when the stock's price was low.
Frank writes: The magnitude of the settlement compared to the original claims demonstrates that it is an extortionate nuisance settlement, being made because it would cost more to defend the suit than to pay the attorneys to go away.
But it should be noted: the settlement is not just outrageous, it is illegal.
We'd all have been better off if backdating was seen for what it really was: a rational response to an irrational accounting rule.
Anyway, Apple was alleged to have backdated a number of options.