To avoid further legal costs and remove any taint of impropriety, Lucent Technologies will pay $315 million to settle 54 shareholder lawsuits that alleged that the company violated federal and state securities laws.
The Murray Hill, N.J., maker of networking equipment did not admit to any wrongdoing. A judge must approve the payouts.
In addition to $315 million in cash and stock, Lucent will issue warrants, estimated to be worth about $100 million.
Lucent’s insurers will contribute another $148 million. And Avaya , a Lucent spin-off, is also responsible for a portion of the settlement. The exact amount is still being determined and will be added to the pool.
“By resolving these legacy issues, we can put all of our energy into running the business and continuing to re-build shareowner confidence in the performance of this company,” Patricia Russo, Lucent’s chairman and CEO said in a statement after markets closed Thursday.
The shareholder settlement comes less than a month after Lucent settled with the Securities and Exchange Commission regarding a probe over how it booked revenues as troubles in the telecom industry were surfacing. Again, Lucent did not admit wrongdoing.
While today’s move will end the suits, it won’t do so quickly. Processing claims will take up to 18 months, and funds won’t be distributed until 2004 at the earliest. Lucent has earmarked another $5 million to administer the settlements.
Lucent’s insurers will contribute $148 million to the settlement’s total. Avaya, a Lucent spin-off, is also responsible for a portion of the settlement. The exact amount is still being determined and will be added to the pool.
Lucent will record a second-quarter charge of fiscal 2003 for approximately $420 million, or 11 cents per share, related to the settlement. This charge may be adjusted in future quarters if Lucent is able to recover a portion of the settlement from other insurance carriers.
The plaintiffs’ attorneys will notify class members about the terms of the settlement and claims administration processes.
Milberg Weiss Bershad Hynes & Lerach was one of the firms representing shareholders. It filed a class-action suit in 2000 claiming that Lucent had over-hyped demand for its optical networking gear and improperly accounted for some deals.
The legal hit came at the same time as the telecommunications sector was descending into a slump that it still has not yet recovered from.
Ethics and Artificial Intelligence: Driving Greater Equality
FEATURE | By James Maguire,
December 16, 2020
AI vs. Machine Learning vs. Deep Learning
FEATURE | By Cynthia Harvey,
December 11, 2020
Huawei’s AI Update: Things Are Moving Faster Than We Think
FEATURE | By Rob Enderle,
December 04, 2020
Keeping Machine Learning Algorithms Honest in the ‘Ethics-First’ Era
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 18, 2020
Key Trends in Chatbots and RPA
FEATURE | By Guest Author,
November 10, 2020
FEATURE | By Samuel Greengard,
November 05, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 02, 2020
How Intel’s Work With Autonomous Cars Could Redefine General Purpose AI
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 29, 2020
Dell Technologies World: Weaving Together Human And Machine Interaction For AI And Robotics
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 23, 2020
The Super Moderator, or How IBM Project Debater Could Save Social Media
FEATURE | By Rob Enderle,
October 16, 2020
FEATURE | By Cynthia Harvey,
October 07, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
October 05, 2020
CIOs Discuss the Promise of AI and Data Science
FEATURE | By Guest Author,
September 25, 2020
Microsoft Is Building An AI Product That Could Predict The Future
FEATURE | By Rob Enderle,
September 25, 2020
Top 10 Machine Learning Companies 2021
FEATURE | By Cynthia Harvey,
September 22, 2020
NVIDIA and ARM: Massively Changing The AI Landscape
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
September 18, 2020
Continuous Intelligence: Expert Discussion [Video and Podcast]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 14, 2020
Artificial Intelligence: Governance and Ethics [Video]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 13, 2020
IBM Watson At The US Open: Showcasing The Power Of A Mature Enterprise-Class AI
FEATURE | By Rob Enderle,
September 11, 2020
Artificial Intelligence: Perception vs. Reality
FEATURE | By James Maguire,
September 09, 2020
Datamation is the leading industry resource for B2B data professionals and technology buyers. Datamation's focus is on providing insight into the latest trends and innovation in AI, data security, big data, and more, along with in-depth product recommendations and comparisons. More than 1.7M users gain insight and guidance from Datamation every year.
Advertise with TechnologyAdvice on Datamation and our other data and technology-focused platforms.
Advertise with Us
Property of TechnologyAdvice.
© 2025 TechnologyAdvice. All Rights Reserved
Advertiser Disclosure: Some of the products that appear on this
site are from companies from which TechnologyAdvice receives
compensation. This compensation may impact how and where products
appear on this site including, for example, the order in which
they appear. TechnologyAdvice does not include all companies
or all types of products available in the marketplace.