A shareholder’s lawsuit filed against Olympus (PINK:OCPNY) over a $1.7 billion accounting scandal is slated for a $2.6 million settlement after a federal judge granted preliminary approval to the deal last week.
Lloyd Graham sued Olympus in November 2011, a month after Olympus sacked its 1st non-Japanese CEO just 2 weeks into his tenure. The ex-CEO, Michael Woodford, had questioned a $687 million fee Olympus paid to an acquisitions consultant.
Olympus later admitted to channeling money through investment funds to hide heavy losses, revealing that nearly $1.7 billion in possibly illegal payments were used to conceal losses on investments over the last 2 decades. Investors reacted to the scandal by slashing some 50% from Olympus stock.
The Graham lawsuit aims to cover anyone who bought Olympus stock between Nov. 7, 2006, and Nov. 7, 2011, according to court documents. A $2.6 million deal was struck Sept. 26, 2013, between the purported class action plaintiffs and the Japanese tech giant, according to the documents.
Although Olympus continues to deny any wrongdoing related to the lawsuit’s allegations, it "concluded that further conduct of the litigation would be protracted and expensive, and that it is desirable that the litigation be fully and finally settled," according to the documents.
Judge Jeffrey Schmehl of the U.S. District Court for Eastern Pennsylvania granted preliminary approval to the settlement Jan. 28, court records show.
Woodford, the company’s first non-Japanese CEO, was sacked after questioning the $687 million acquisition consulting fee just 2 weeks into the job. He resigned from Olympus’ board after the massive accounting scandal broke. The Graham lawsuit originally named Woodford as a defendant, but he was dismissed from the case in January 2013, the records show.