The big news today is the securities class action settlement by Hanover Compressor Co., a natural gas compression services company based in Houston, Texas. In addition to compensating investors with a combination of cash, stock, and debt (worth around $80 million according to press reports), Hanover agreed to a series of corporate governance reforms above and beyond anything required by Sarbanes-Oxley or other federal securities laws. Notably, Hanover will: (1) change its outside auditing firm every five years; (2) ensure that two-thirds of its board consists of independent directors; and (3) canvass shareholders holding more than 1% of the company’s stock for a list of nominees for two new independent director positions on its board.
The settlement still has to be approved by the U.S. District Court for the Southern District of Texas. Milberg Weiss is lead plaintiffs’ counsel and has issued a press release. Numerous wire services and newspapers have run articles, including Reuters, USA Today, and the Houston Chronicle.