On September 25, 2009, Judge Susan Illston of the United States District Court for the Northern District of California approved a $9.5 million class action settlement between UTStarcom, Inc. ("UTStarcom" or the "Company") and Lead Plaintiff James R. Bartholomew, resolving claims that the Company had backdated executive stock options and misrepresented the Company's financial results during a period spanning several years. Finkelstein Thompson LLP served as Lead Counsel for the Class in this action.

The lawsuit alleged that in an effort to increase the remuneration of the Company's management and to inflate the Company's reported net income, UTStarcom intentionally manipulated stock option grants by falsely "backdating" the grants to dates with unusually low closing prices of the Company's stock, thereby artificially reducing the exercise price for the executive stock options. The lawsuit further alleged that the Company's stock price declined significantly when the Company disclosed the options backdating practice on November 7, 2006 and July 24, 2007, resulting in damages to the Company's shareholders. UTStarcom has denied and continues to deny these allegations.

The settlement includes all persons who purchased or acquired UTStarcom common stock between September 4, 2002 and July 24, 2007, inclusive, and were damaged thereby. In her final approval order, Judge Illston stated that the settlement was, "in all respects, fair, just, reasonable and adequate to the Class."