Brooks Sued by Shareholders
Staff Reporter -- EDN, June 1, 2006
Automation and integrated subsystems provider Brooks Automation Inc. announced Wednesday it has been notified that a shareholder derivative lawsuit was filed against Brooks it in the Superior Court of the Commonwealth of Massachusetts on May 23.
The lawsuit, which alleges breaches of fiduciary duties and unjust enrichment in connection with certain prior stock option grant practices, is the latest scar on the Chelmsford, Massachusetts-based company’s record. The same week of the suit filing, Brooks announced that it would face a grand jury document subpoena requesting records pertaining to the granting of stock options.
A week before that, Brooks had announced it would restate its financial statements from fiscal years 1999 through 2005 because it believed that it accounted for certain matters concerning stock options incorrectly, and as a result recognized less compensation expense than it should have in periods prior to this fiscal year.
Brooks is not alone in facing such charges and inquires. The list of tech companies that have come under scrutiny for stock option issues in recent weeks has growth to include AMCC, Altera and Maxim, among others.
Brooks has been named as a nominal defendant in the suit, along with certain directors and former directors.
The company's board of directors and management said in a statement that it intends to review the allegations and will address the matter and respond in a manner it considers to be in the best interests of the shareholders.
