Desimone v. Barrows

OPINION

STRINE, Vice Chancellor.

I. Introduction

The nominal defendant in this derivative action, Sycamore Networks, Inc., is one of the many corporations drawing adverse attention regarding the methods by which it granted stock options to its officers, employees, and directors. Last year, the Securities and Exchange Commission and United States Department of Justice launched investigations into Sycamore’s stock options practices on the suspicion that Sycamore had misrepresented — by backdating — certain options grants and engaged in related misbehavior.

Armed with the fact of the government…