Fiber optic equipment company Luna Innovations Inc. has reached a deal with its investors to settle their derivative claims alleging the company was damaged by its failure to properly recognize revenue in its filings with the U.S.Securities and Exchange Commission.
According to a motion filed Wednesday in California federal court, the calls for a host of corporate governance reforms, which would reduce the likelihood of repeat governance lapses such as those the shareholders described in the lawsuit.
A preliminary hearing onnthe deal is set for Dec. 2. The suit’s individual defendants include Luna’s audit committee board chair Warren B. Phelps III, former Chief Financial Officers Eugene J. Nestro and George Gomez-Quintero, as well as several current and former board members. Among other things, the deal requires the chair of Luna’s audit committee to meet with the company’s finance chief at least four times a year to discuss quarterly and annual financial results and regulatory compliance issues.
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