Remember the case of Aamer Latif, the entrepreneur at Nishan Systems who sued the venture capitalists on his board for cheating him and other common shareholders out of their just return?

Well, as we indicated last week, Latif has settled the case after over a year of fighting in court. Under the accord, both sides can’t talk about the out-of-court deal. But we’ve been following this case ever since we broke the news about it here. It is significant because of the Epinions case recently filed, and other cases like it. At one point, last October, we even wrote a brief to the court asking that the Nishan case be kept open to the public, because of the potential public interest in it. Interestingly, the defense had asked for the proceedings to be sealed. Ultimately, the judge decided to keep the case open. Apparently, that decision and several other court decisions in December finally forced the Nishan defendants to settlement talks.

Private Equity Week writes today about the settlement, which provides the latest. From our own talk with Latif’s attorney, though, we didn’t get a sense that Latif has a smile on his face. In fact, our reading of the case, along with help from a secret source, indicates that the settlement was less than ideal, for both sides. Settlement always means compromise. Latif had told us initially he was fighting for the cause, to set a precedent in Silicon Valley that would prevent exploitation of entrepreneurs going forward. His side had even threatened to appeal the case to the Supreme Court, if need be. Independent from our newspaper story, he took out a full-page ad on the back of our business section, telling readers to go to www.enronvalley.com, a site he’d set up to explain the details of his case. However, the settlement, under NDAs, doesn’t fully accomplish what he originally set out to do. He hasn’t updated his site since January of last year.

On the other hand, Latif was a realist. From the beginning, he never ruled out a settlement. And he did manage to force the other side to the table, quite an accomplishment given his limited resources: We’ve heard that Sagy’s small firm had five people on the case. Meanwhile, the defendants, including Lightspeed Ventures and ComVentures, had hired two high-powered law firms on the case, O’Melveny & Myers and Shearman & Sterling — reportedly with about 15 partners on the case. They managed to keep the case stalled for more than a year.

So what can we say about Latif’s financial settlement? Nothing, because it’s under wraps. And how about the $13 million, or 20 percent, of the proceeds from the original Nishan acquisition put in escrow to handle possible legal challenges? Well, once you take out the considerable legal fees, you’ve got maybe a few million left, if that, to hand back to the shareholders. That’s not a lot — and certainly not a real thumb in the eye of the other side.

Sagy, his attorney, said of Latif: “He�s done a great thing for the community. He was willing to sue the majority shareholders and directors who did not follow corporate governance laws and usually people are not inclined to sue because they don�t want to upset powerful people.” Sagy wouldn’t comment on the settlement’s details.

We put in calls to Lightspeed and ComVentures, but couldn’t immediately reach anyone for comment.

Btw, here’s the final complaint.