Bazaarvoice settlement agreement with shareholders approved
- Christopher Calnan
- Staff Writer- Austin Business Journal
A Travis County District judge approved on Monday a settlement agreement to resolve an insider trading lawsuit between Bazaarvoice Inc. and its shareholders.
Judge John Dietz approved the settlement that calls for more than 40 policy changes and reforms to the Austin-based company's corporate governance. During a 25-minute hearing, he also approved a $1.6 million payment to the shareholders' lawyers and a $25,000 case contribution award to lead plaintiff Alex Edmans, a finance professor at the University of Pennsylvania's Wharton School.
The lawsuit, filed in March 2013, alleged that executives and investors cashed in stock worth $89 million after the U.S. Department of Justice began investigating Bazaarvoice's 2012 acquisition of PowerReviews Inc. — but before that investigation was publicly known. A federal judge subsequently determined Bazaarvoice (Nasdaq: BV) violated antitrust regulations when it bought PowerReviews to control the market price for online ratings and reviews.
As part of the settlement, while not admitting any wrongdoing, fault or liability, Bazaarvoice is required to establish an automated whistle blower hotline and provide its directors and officers with annual training on legal compliance issues, according to a Sept. 30 filing with the U.S. Securities and Exchange Commission that announced a tentative settlement in the case. The proposed reforms would be in effect for three years, the filing indicates.
A Bazaarvoice spokesman said Monday afternoon the company had no further comment.
Edmans attorney Jeffrey Norton from New York-based Newman Ferrara LLP told Dietz during Monday's hearing that one of the most notable changes is the requirement of a lead acquisition director on the board charged with vetting potential antitrust issues in acquisitions worth more than $10 million. In an interview after the hearing, Norton said facts uncovered during the DOJ's investigation made the insider trading lawsuit much faster and easier.
Bazaarvoice, founded in 2005, manages online product ratings and reviews for companies such as Wal-Mart Stores Inc. (NYSE: WMT) and Best Buy Co. Inc. (NYSE: BBY). It employs almost 800 workers.
Earlier this month, Bazaarvoice disclosed plans to move its headquarters next year to a new four-story building in North Austin that could accommodate as many as 600 employees. It would relocate to Quarry Oaks, a new Class A building, at 10901 South Stonelake Boulevard, according to an SEC filing.
Christopher Calnan covers technology, finance and clean energy for the Austin Business Journal. Subscribe to the Energy Inc. newsletter