Cisco shells out $91 million to appease shareholders

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Cisco has resolved a five-year long legal battle by agreeing to pay a settlement fee of $91 million.

The networking giant agreed to make the payment in respect of a lawsuit that dates back to 2001, alleging that the company omitted certain details and misled shareholders.

The mammoth payout will be distributed to shareholders affected between November 10, 1999 and February 6, 2001. The prosecution, Lerach, Coughlin, Stoia, Geller, Rudman and Robbins LLP, said that it was satisfied that the settlement adequately compensated shareholders for the alleged wrong doing.

But despite the settlement, Cisco still strongly contests the allegation.

"Cisco continues to firmly believe that the suit's claims are without merit, and we have been eager to achieve a victory in this case," said Mark Chandler, senior vice president and general counsel for Cisco.

"Given the expense and disruption associated with prolonged litigation, and the fact that this resolution is achieved with no additional cost to Cisco and with the consent of our insurance carriers, we believe this settlement is in the best interest of Cisco and its shareholders."

Cisco is not the only company to have come under the spotlight recently with regards to financial practices.

Earlier this month, Apple announced that it would be re-filing its financial earnings for the past four years due to an investigation into questionable stock option grant activities. During that time the company has amassed some $3 billion in profit, which looks set to be altered by the findings.

And in July, former Brocade chief executive Greg Reyes appeared in court for his alleged involvement in stock option fraud.

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