teen dating violence awareness month - Cnet options backdating
This agreement was not, however, all encompassing, and now the parties dispute the scope of books and records to which plaintiffs are entitled.Summarized as succinctly as possible, the issue is whether plaintiffs are entitled to documents relating to options granted before plaintiffs owned stock in CNET.That article and its findings have led to the filing of numerous federal and state law actions and to well over one hundred SEC investigations.
There, however, the federal judge "specifically denied the plaintiffs' request for leave to replead." With this explicit ruling in hand, Vice Chancellor Lamb concluded that the shareholders were estopped from relitigating demand futility and, therefore, lacked a proper purpose under section 220.
Finally, defendant also cites language from the Supreme Court's opinion in Saito that indicates "if the stockholder's only purpose [in pursuing a section 220 books and records inspection] was to institute derivative litigation," one might reasonably question "whether the stockholder's purpose was reasonably related to his or her interest as a stockholder." Id.
On June 27, 2006, CNET disclosed that its option granting practices were under investigation by the U. Attorney for the Northern District of California and by the Securities and Exchange Commission.
The next month, CNET announced that an internal investigation conducted by a special committee confirmed the CFRA report and announced that the company would need to restate its financial statements from 2003-05. 2007) (finding demand futile under the second prong of Aronson where the complaint's particularized facts showed that a majority of the current board sat on the compensation committee that granted backdated options in violation of the company's stock option plan).
At issue, however, is the scope of the investigation that plaintiffs' proper purpose will permit. the stockholder should be given enough information to effectively address the problem. Because plaintiffs are only seeking to bring a derivative claim, defendant argues, and because plaintiffs can only bring claims for wrongs that occurred after plaintiffs purchased stock, there is no reason for plaintiffs to inspect documents before the purchase date. Because the fund could not possibly have standing to challenge any breach it purportedly wanted to investigate, allowing an inspection of books and records under section 220 was improper.
Section 220 does not sanction a "broad fishing expedition," but "where a § 220 claim is based on alleged corporate wrongdoing, . In so arguing, defendant relies heavily on Polygon Global Opportunities Master Fund v. In West Coast, shareholders attempted to conduct a section 220 inspection after their federal derivative claim was dismissed for failure to adequately plead demand futility.
After CNET's disclosures in the fall, plaintiffs amended their derivative complaint, and the defendants moved to dismiss for failure to make a demand on the CNET board. Consequently, plaintiffs had demonstrated that only one member of the then-current board received back-dated options.
Applying the Aronson test for demand futility, the district court granted the motion to dismiss. Judge Alsup also found unpersuasive plaintiffs' attempts to show demand futility under the second prong of Aronson, concluding that plaintiffs failed to allege the particularized facts necessary to demonstrate that board members actually engaged in the process of backdating.
For example, a shareholder seeking a books and records inspection under section 220 in order to investigate mismanagement or wrongdoing "must present `some evidence' to suggest a `credible basis' from which a court can infer that mismanagement, waste or wrongdoing may have occurred." See 1 EDWARD P. TUREZYN, ROBERT SAUNDERS, FOLK ON THE DELAWARE GENERAL CORPORATION LAW § 220.6.3 (supp. 20, 2007, a.m.) (arguing that the Seinfeld decision "illustrates that courts deliberately discourage the use of inspection rights by shareholders, using not the language in the statute but excessive pleading standards").Tags: Adult Dating, affair dating, sex dating