Options backdating scorecard

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It may be that, generally, suits alleging backdating are viewed as weaker on the merits than other class actions.

Table 1 shows that actual settlements to date in backdating class actions have averaged less than 38% of the amounts predicted by the model.On average, class actions involving backdating allegations have settled for less than half the amounts forecast by NERA's settlement prediction model.As only eight cases have fully settled thus far, the reasons for the low settlements are not yet clear.While one case, Meade Instruments, Inc., settled for approximately 97% of the amount predicted, the other seven cases each settled for less than 60% of the predicted amount, and in one case (Rambus, Inc.), the actual settlement was only about 8% of the predicted amount.The single most powerful determinant of settlement value is "investor losses": a simple estimate of the total losses by purchasers of the company's shares during the class period relative to an investment in the S&P 500 index.

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