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The Suburbanite
  • Judge OKs settlement in Diebold shareholder suit

  • A judge approved reforms to Diebold’s corporate governance Friday, ending a shareholder’s lawsuit prompted by an investigation of the company’s accounting practices.

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  • A judge approved reforms to Diebold’s corporate governance Friday, ending a shareholder’s lawsuit prompted by an investigation of the company’s accounting practices.
    Attorneys for a Florida-based shareholder and attorneys for Diebold’s current and former directors and officers hashed out the agreement earlier this year. Friday’s hearing in Stark County Common Pleas Court was for other shareholders to comment on the settlement, but none showed up.
    The pact approved by Judge Frank Forchione calls for Diebold’s CEO and chairman of the board to be separate positions, selection of a new independent board member, an enhanced whistle-blower hot line, an annual advisory vote by shareholders on executive compensation and sets rules regarding board governance and annual audits.
    The judge also approved $1.2 million in fees for plaintiff Selma Levine’s attorneys.
    Levine, a small shareholder, sued in October 2010, seeking monetary damages in favor of Diebold, reform of the company’s corporate governance and attorney fees and expenses. She did not receive any money personally and never appeared in court.
    The lawsuit stemmed from an investigation of Diebold’s accounting practices by the Securities and Exchange Commission. In 2008, the Green-based maker of ATMs and bank security systems, restated more than four years of financial reports, and ultimately paid a $25 million penalty, without admitting wrongdoing, to settle civil securities fraud charges brought by the SEC.
    In her lawsuit, Levine contended the company lost tens of millions of dollars in connection with the investigation and wasted hundreds of millions of dollars when it bought back stock at an artificially inflated price.
    Diebold spokesman Mike Jacobsen released a statement after the hearing: “We are pleased to put this lawsuit behind us, and, as always, we remain committed to operating within a strong corporate governance and compliance environment.”