A federal judge has granted preliminary approval toward a $4.25 million settlement between Monster Worldwide Inc., which owns the popular Monster.com job-search Web site, and a class of plaintiffs alleging the company and its executives breached their fiduciary duty by artificially inflating stock prices to the detriment of employees' retirement plans, a practice sometimes referred to as backdating.
Backdating takes place when executives change the award date of previously granted stock options in shares of their own company so that their securities are worth more. The backdating issues at Monster Worldwide resulted in the criminal convictions of two former senior officials. Monster recently agreed to pay $4.25 million to a group of employees who held Monster stock in their 401(k) plans. These employees sued alleging violations of ERISA and contending they had bought shares in their 401k plans while their bosses -- Monster Worldwide executives -- made false disclosures about Monster's financial condition and illegally lined their pockets with back-dated stock option grants.
Judge Alvin Hellerstein of the U.S. District Court for the Southern District of New York on Thursday granted preliminary class certification and preliminary approval of the settlement.