Brocade Communications Systems, Inc.
Robbins LLP filed a shareholder derivative action against officers and directors of Brocade Communications Systems, Inc., an industry leader in data center networking solutions, following the announcement that Brocade would have to restate two fiscal years of financial statements to correct its improper accounting for stock-based compensation expenses. Brocade’s insiders had for years engaged in a secret stock option backdating scheme designed to reward executives and recruit engineers with stock options priced below their fair market value as of the date of the grants. Robbins LLP successfully petitioned the court to proceed with litigation to prevent an inadequate settlement of a related federal action, which would have released the officers, directors and agents of the company responsible for the criminal backdating scheme for no money to the company or a payment of attorney’s fees, even as the U.S. Government pursued and ultimately won criminal convictions against the responsible executives.
After almost three years of diligently prosecuting the case, during which Robbins LLP engaged in extensive motion practice, reviewed approximately 3 million pages of documents and marshaled evidence from related cases involving the conduct at Brocade, Robbins LLP was retained to serve as co-counsel to Brocade’s Special Litigation Committee, which, after presentations from Robbins LLP, authorized the continued prosecution of claims against Brocade’s officers and directors and on behalf of the shareholders.
In re Brocade Communications Systems, Inc. Derivative Litigation, No. 1:05CV041683 (Cal. Super. Ct.-Santa Clara County).