A California court issued a final approval of a settlement in a federal class action lawsuit filed by investors against no-contract Cricket provider Leap Wireless (NASDAQ:LEAP). Under the settlement, Leap agreed to pay out $13.75 million. The carrier did not admit to any wrongdoing as part of the settlement, and Leap's insurance will handle the payment.
The issue stems from Leap's announcement in 2007 that it would restate certain financial results. Investors argued Leap made false and misleading statements about its business prior to its announcement that it would need to restate its finances, and subsequently filed lawsuits between 2007 and 2008 on the topic, which were collected into a class action.
Along with the payout, Leap agreed to "adopt and implement and/or continue to implement or observe various operational and corporate governance measures," according to the company's recent filing with the Security and Exchange Commission.
Such lawsuits are relatively common results of companies' financial restatements.
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