Key facts
- Seagate Technology agreed to a $175 million settlement in a shareholder lawsuit.
- The lawsuit alleged Seagate defrauded shareholders by concealing sales to Huawei that violated U.S. export control laws.
- Seagate previously paid a $300 million penalty to the U.S. Department of Commerce for similar violations.
- Seagate has set aside $105 million for the settlement, with insurers expected to cover about $70 million.
- The settlement requires preliminary court approval.
Shareholder lawsuits often arise when companies are found to have violated laws or regulations, leading to financial penalties or reputational damage. In this case, the alleged concealment of sales to Huawei, a company subject to U.S. export controls, triggered claims that Seagate misled its investors about its compliance and business practices, impacting its stock price.