Backdating Derivative Actions And Demand Futility

Law360, New York (May 10, 2007, 12:00 AM EDT) -- In the last month, two federal district courts in California have dismissed shareholder derivative complaints alleging backdating of stock options for failure to plead demand futility with the necessary particularity: In re CNET Networks Inc. Shareholder Derivative Litigation, 2007 WL 1089690 (N.D. Cal. April 11, 2007) and In re Computer Sciences Corporation (CSC) Derivative Litigation, No. CV 06-05288 MRP (Ex) (C.D. Cal. March 26, 2007).

Plaintiffs in both cases contended that it would have been futile to demand that the company’s board of directors pursue backdating...
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