Rambus Jumps on Announcement That High Level Execs Weren't Involved in Options Backdating

Very interesting announcement late Friday by Rambus (RMBS) concerning its ongoing stock-option backdating probe. Rambus said that its Special Litigation Committee had completed its review of claims related to stock-options backdating that are alleged in shareholder derivate suits against a number of former and present officers and directors.

Rambus has previously said that its audit committee concluded that “a number of stock options granted to its employees had been misdated.” Now, the company says that it has determined that “all claims should be terminated and dismissed against all the named defendants in the derivative actions” with the exception of those against former Rambus exec Ed Larsen, who was VP of human resources from September 1996 to December 1999, and then senior VP for administration until July 2004.

In fact, the company says that it “intends to assert control over the litigation” involving Larsen.

The company also said that it has reached settlement agreements with certain former officers, “conditioned upon the dismissal of the claims against them” in the derivative suits. The value of the settlements is more than $6.5 million in cash as well as “substantial additional value” relating to the relinquishment of claims to over 2.7 million stock options.

Rambus said its report on the matter had been sent to federal Judge Jeremy Fogel of the North District of California, who is overseeing the shareholder derivative suits.

Rambus shares have jumped on this news, which implies that no higher level execs were involved in options backdating issues, although there are other parties to the litigation that could disagree with the findings and continue to pursue other remedies.

RMBS 1-yr chart: