Electronics maker Olympus Corp. of the Americas has reached an 11 billion yen ($92 million) out-of-court settlement in Japan with institutional investors over allegations of accounting fraud. The settlement was reached on March 27, according to a statement by litigation funder and alternative-dispute-resolution specialist DRRT, which was involved in the case. Olympus has been embroiled in controversy since 2011, when former Olympus CEO Michael Woodford first revealed an accounting fraud by questioning exorbitant advisory fees paid during past mergers. Woodford himself later filed and settled claims that the company had fired him in retaliation for blowing the whistle.

A preliminary settlement was reached in October 2013 but details were not finalized until recently. Olympus was subsequently forced to restate five years of financial earnings in order to remain listed on the Tokyo Stock Exchange. Three former Olympus executives pled guilty to accounting fraud in Japanese court in 2012, after the company admitted to hiding more than $1 billion in losses through a series of sham transactions, including a $687 million payment it made for financial advice on its $2 billion takeover of British device company Gyrus Group PLC in 2008.

In February, Olympus Corp. said the U.S. subsidiary had been facing an investigation for several years by the U.S. Department of Justice for purportedly violating anti-kickback laws and the False Claims Act (FCA), and said the parties had started discussions to settle the probe. Olympus Corp. of the Americas has been under investigation by the DOJ since November 2011 over potential violations by the company’s medical business of the Anti-Kickback Statute and the FCA.

Prosecutors in the United Kingdom’s Serious Fraud Office brought criminal charges against Olympus Corp. in September 2013. The executives – the former chairman of Olympus and two others – received suspended prison sentences in Tokyo court in July 2013. In September 2013, Chan Ming Fon, a former banking executive in Singapore, pled guilty to conspiring to help Olympus hide money as part of the accounting fraud.

About four months later, a Pennsylvania federal judge preliminarily approved a $2.6 million settlement to be paid by Olympus to resolve a shareholder class action claiming the company failed to tell investors that it had paid “an unprecedented $687 million” fee – which far exceeded the typical Wall Street advisory fee of 1 to 2 percent – for advice on the Gyrus deal. The judge issued a final judgment ending the case several months later. In April, six Japanese banks sued Olympus demanding nearly 28 billion yen ($233.7 million) for losses related to the accounting scandal.

Source: Law360.com

We're here to help!

We live by our creed of “helping those who need it most” and have helped thousands of clients get the justice they desperately needed and deserved. If you feel you have a case or just have questions please contact us for a free consultation. There is no risk and no fees unless we win for you.

Fields marked * may be required for submission.

I never dreamed how much this would mean to me

I received another check today, much to my surprise. Thank you, thank you, thank you! I never dreamed how much this would mean to me in my golden years, as I have had hearing problems for years and needed to update my hearing aids, but with a limited income, found that was impossible. I now have the best hearing aids that I have ever had, thanks to you fighting so hard on my behalf.