Federal Judiciary

ASLEEP AT THE SWITCH
By Mark Thompson
markthomp@yahoo.com
Posted 10-15-08

The board of directors of Comverse Technology Inc. was apparently asleep at the switch while company executives were backdating stock options for their own pecuniary benefit, yet New York County Supreme Court Justice Richard B. Lowe III seemed to think the same board was capable of coming up with a remedy for investors who were wronged by the alleged self dealing. The Appellate Division begged to differ.

A unanimous appellate panel has reinstated the shareholder derivative suit that Lowe dismissed because, in the panel’s opinion, the allegations laid out in the lawsuit strongly suggest that any attempt to ask the board to correct a problem that happened on its watch would have been futile.  

Full post as published by Judicial Reports on October 15, 2008 (boomark / email).