One thing that prosecutors have so far failed satisfactorily to explain is why so many top executives engaged in backdating, which was done so openly and widely in Silicon Valley that it is hard to believe anyone thought they were committing a crime.Even Steve Jobs, the iconic boss of Apple, did it—though, unlike dozens of other executives, he has not (so far) had his collar felt by the authorities.
In order dated July 16, 2009 (here), the court denied in part the defendants’ motions to dismiss, but perhaps more telling with respect to the timing and size of the securities lawsuit settlement, on April 23, 2010, following an eightday criminal trial, Maxim’s CFO Carl Jasper was found liable for securities fraud related to the backdating, as noted in this April 26, 2010 article by Zusha Elinson in The Recorder, here.
The SEC had previously sued the company and its CEO in an options backdating enforcement action (about which refer here).
Although some noteworthy settlements from the subprime-related securities class action litigation wave have started to accumulate (refer for example here), there are still some impressive settlements coming in from the prior scandal.
In the third largest options backdating-related securities class action lawsuit settlement, Maxim Integrated Products has agreed to settle the claims against all defendants in the options-related securities suit pending against the company for a payment of $173 million.
One possible explanation is that everyone in Silicon Valley at the time was so convinced in the potency of options that the possibility of illegality was not even contemplated.