VMware
Settlement of Lamartina v. VMware, Inc., et al.
No. 5:20-cv-02182-EJD (VKD)
The parties have reached a settlement of this action, pending in the United States District Court for the Northern District of California. The settlement provides for the payment of $102,500,000 for the benefit of eligible Class Members. Lead Plaintiff Eastern Atlantic States Carpenters Pension Fund alleged that during the period between August 24, 2018 and February 27, 2020, inclusive, Defendants purportedly made materially false or misleading statements with respect to VMware, Inc.’s (“VMware” or the “Company”) sales backlog throughout the Company’s 2019 fiscal year, in violation of §10(b) of the Securities Exchange Act of 1934, which caused the price of VMware Class A common stock to trade at allegedly inflated prices. The Company’s backlog allegedly consisted of sales discretionarily held back to be recognized as revenue in later periods, which artificially enhanced the Company’s reported revenue in 2020 despite operational challenges negatively impacting the Company that year.
Lead Plaintiff alleged that the truth concerning VMware’s backlog was revealed through a series of disclosures throughout 2020, including the February 27, 2020 announcement that the U.S. Securities and Exchange Commission was investigating the Company’s backlog and associated disclosures. Ultimately, that investigation led to an $8 million civil money penalty levied against VMware by the SEC. The $102,500,000 settlement achieved in this case represents nearly 13 times the recovery obtained by the SEC and is a remarkable result for the Class.
The Class consists of all persons who purchased the publicly traded Class A common stock of VMware during the period from August 24, 2018 through February 27, 2020, inclusive, and were damaged thereby. Excluded from the Class are Individual Defendants and their immediate family members. Also excluded from the Class are those persons and entities who timely and validly requested exclusion from the Class pursuant to the Notice.
The settlement was approved by the Court on March 31, 2025.
If you have any questions about the settlement or the litigation, please contact the Shareholder Relations Department at 1-800-449-4900.
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