Mercury Proposes Settlement with SEC

The $35 million settlement, linked to options-granting practices, needs SEC and Hewlett-Packard approval.

Mercury Interactive Corp. says it has proposed paying a $35 million civil penalty as part of a settlement with the Securities and Exchange Commission stemming from an investigation into its stock-option practices.

Under its proposal, the software company — which in July agreed to be acquired by Hewlett-Packard for $4.5 billion — also would consent to the entry of a final judgment by a federal court that permanently enjoins it from violations of the antifraud and other provisions of the federal securities laws. The proposed settlement is contingent on the review and approval of final documentation by the company and the SEC’s staff, and is subject to final approval by SEC commissioners, according to Mercury.

As required in its merger agreement with Mercury, HP has consented to the settlement offer and will also be required to approve the final settlement documentation, according to the announcement. Mercury also notes that it continues to cooperate with the SEC and other government agencies.

Meanwhile, HP says it extended its tender offer for all of Mercury’s stock until October 13. The offer was previously set to expire at midnight on September 28.

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