Network Associates settles $30m lawsuit

Troubled security vendor Network Associates (NAI) has agreed to a settlement over its protracted lawsuit with its shareholders over accounting irregularities.

NAI, which makes the McAfee anti-virus software, will distribute a $30m pay out between 80,000 and 100,000 investors, after allegedly inflating its stock price by improperly accounting for acquisitions. The firm bought companies in the 1990s, stating them as "in-process research and development projects'. The Securities and Exchange Commission cracked down in 1998, forcing the company to restate its results for 1997 and 1998. Because of the accounting change, sales in the next quarter fell from $245.2m to $25.2m, and have continued to slide since. Speaking exclusively to silicon.com last week, George Samenuk, CEO of NAI, said he didn't want to comment on the past 18 months, during which the company's revenues fell by 75 per cent, its share price plummeted and its long term CEO Bill Larson resigned. Samenuk said: "The firm would maniacally focus on its customers and change its business model for end user sales, to point the firm back to greatness." Nasdaq listed NAI shares that have dragged as low as $3.25 in December, closed up 4.35 per cent, to $6.75, yesterday.