$VMW: Broadcom Adds AI Security to VCF — But $102.5M Settlement Lingers

Court: N.D. California

Case: 5:20-cv-02182

Broadcom is doubling down on cybersecurity and compliance in VMware Cloud Foundation (VCF), unveiling new features like Advanced Cyber Compliance, Zero Trust protections for AI workloads, and post-quantum cryptography support. The push targets highly regulated industries under mounting pressure from ransomware and compliance rules. Still, while VMware Cloud Foundation evolves into a more secure private cloud platform, the company continues to face the shadow of a $102.5 million settlement tied to allegations of misleading investors about unfilled orders.

• Advanced Cyber Compliance automates monitoring, remediation, and recovery after cyber incidents.
• vDefend upgrades add Zero Trust lateral security and AI-specific workload protection.
• Avi Load Balancer updates include post-quantum encryption, Kubernetes mTLS, and WAF tools.
• Broadcom integrating compliance frameworks to address 71% of enterprises citing cross-border regulatory challenges.
• Legal overhang: $102.5M settlement for allegedly misleading disclosures on VMware’s backlog.

Timeline Overview

• Aug 23, 2018: Start of class period tied to alleged backlog misstatements.
• 2019–2020: VMware disclosed backlog declines, triggering stock drops.
• Feb 27, 2020: End of class period for investor claims.
• Oct 4, 2024: $102.5M settlement reached.
• Mar 31, 2025: Court hearing scheduled to finalize payout.

Allegations Include

• Misrepresenting sales backlog visibility to investors.
• Artificially inflating demand signals to sustain stock price.
• Failing timely disclosure of backlog declines.
• Violating Exchange Act §10(b) and Rule 10b-5.

Investor Update

• $102.5M cash settlement to be distributed via SEC-approved plan.
• Eligible investors: VMware Class A stock purchased Aug 24, 2018 – Feb 27, 2020.
• Claims due March 17, 2025; objections/exclusions by March 10, 2025.
• While AI security strengthens VMware’s product story, investor trust depends on rebuilding post-settlement credibility.

You can check more information about it HERE.