Judge OKs Yahoo's $80 Million Deal to Settle Securities Litigation Over Data Breaches
The deal, which got sign-off from U.S. District Judge Lucy Koh on Friday, settles claims that the company misled investors about four breaches which touched up to 3 billion Yahoo accounts.
September 10, 2018 at 02:24 PM
2 minute read
A federal judge in San Jose has given final approval to an $80 million deal Yahoo Inc. reached to settle investor claims that the company failed to disclose four data breaches—breaches which affected as many as 3 billion Yahoo accounts and detrimentally impacted the company's stock once they came to light.
The settlement, which U.S. District Judge Lucy Koh of the Northern District of California signed off on on Friday, provides $14.4 million in attorneys fees—or roughly 18 percent of the total settlement—for the plaintiffs' attorneys, led by class counsel at Glancy Prongay & Murray and Pomerantz LLP. The settlement technically was reached by Altaba Inc., the name the company formerly known as Yahoo took on after Verizon acquired its operating business.
Representatives of Altaba and Morrison & Foerster's Jordan Eth, who represented the company in the securities case, didn't immediately respond to messages Monday.
Judicial approval of the private securities class action settlement comes a little more than four months after the company agreed to pay $35 million to settle U.S. Securities and Exchange Commission claims that Yahoo misled investors about a 2014 data breach that affected more than 500 million user accounts. Although the settlements could pave the way for future securities suits targeting companies whose stock prices took hits in the wake of large data breaches, plaintiffs still must link their losses to inadequate breach disclosures.
Michael Dicke, co-chairman of the firm's securities enforcement group at Fenwick & West, said that although Yahoo's case is something of an “outlier,” it has made company's pay attention to whether a particular breach is potentially ”material” information that should be disclosed to investors.
“The breadth of the breach and then the amount of attention on it likely caused more of a market reaction than in a typical [breach],” Dicke said.
Even with Friday's approval of the securities settlement, Koh still has Yahoo cases on her docket. Koh is overseeing multidistrict litigation targeting the company with claims on behalf of users whose data was stolen. According to court papers filed last week in the MDL, former Yahoo general counsel Ron Bell is set to be deposed Wednesday and former CEO Marissa Mayer is scheduled to be questioned in October.
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