Semtech Corporation Agrees to Settlement In Shareholder Class Action

You must submit the settlement "Proof" form attached below, in order to participate in this settlement. There is a strict deadline of July 24, 2011 by which all claims must be submitted. The instructions for submitting are included in the "Proof" and the "Notice" files attached below for your download. DO NOT SEND THE FORMS TO THE SHAREHOLDERS FOUNDATION, FOLLOW THE DIRECTIONS IN THE "PROOF".

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Company Name(s): 
Semtech Corporation
Case Name: 
Semtech Corporation Class Action 8/10/2007
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: SMTC
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
08/10/2007
Class Period Begin: 
08/27/2002
Class Period End: 
07/19/2006
Date Settled: 
06/27/2011
Settlement Amount: 
$20,000,000
Deadline to Participate in Settlement: 
07/24/2011
Settlement Notice: 
Settlement Proof: 
Summary: 

APRIL 2011 - As per the Notice: If you purchased or otherwise acquired the common stock of Semtech Corporation during the period between August 27, 2002 and July 19, 2006, inclusive, then you may be entitled to a payment from a class action settlement.

December 2010 - Semtech announced it has entered into an agreement in principle to settle all claims asserted against all defendants in the putative class action concerning the Company's stock option accounting practices captioned In re Semtech Corporation Securities Litigation. The agreement in principle provides for the payment of $20 million by the Company. The agreement in principle contemplates the negotiation and execution of a final settlement agreement. The proposed settlement would fully resolve all claims against the Company, all current officers and directors of the Company named in the lawsuit, and certain former officers and directors of the Company named in the lawsuit. No parties admit any wrongdoing as part of the proposed settlement. The settlement also is subject to preliminary approval by the Court, notice to the putative class and subsequent final approval by the Court.

The agreement in principle was entered into after the Company announced its preliminary results of operations for the three and nine month periods ended October 31, 2010 but prior to the filing of the Company's Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission. Under U.S. Generally Accepted Accounting Principles the agreement represents a recognized subsequent event in its financial statements for the three and nine month periods ended October 31, 2010.

October 2007 - On October 15, 2007, the Judge Denny Chin issued the Order to transfer the case from the U.S. District Court for the Southern District of New York to Central District of California. On October 22, 2007, the case was transferred out.

According to a press release dated August 22, 2007, the complaint alleges that Defendants Semtech and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by artificially inflating Semtech’s previously reported financial results through an improper stock option backdating scheme that was perpetrated at the highest levels of the Company. Defendants carried out this scheme by intentionally manipulating the grant dates of stock options awarded to themselves and other officers and directors of the Company and selecting grant dates at which Semtech stock traded at much lower prices than the actual grant dates. In public disclosures, however, Defendants falsely claimed that the grants were dated and priced as of the date of the actual grants.

The complaint further alleges that on July 20, 2006, Semtech revealed that it expected to record material amounts of additional compensation expense and that it expected to restate its financial results from fiscal 2002 through 2006, while it also disclosed that its prior financial statements should not be relied upon. Semtech’s share price fell in reaction to this announcement, falling from $13.19 to $12.37 per share. Semtech shares continued to fall in reaction to the news on July 21, 2006, closing at $11.60 per share.