Ex Comverse CEO Tagged in White Collar Crime Nods for Million-worth Settlement
Former Chief Executive Officer of Comverse Technology, Inc. has conceded to the $53.6 million settlement entered by the Securities and Exchange Commission (SEC) following the white collar crime charges against him, SEC said today.
The SEC has filed civil charges against Jacob Alexander and two other former executives on August 6, 2009 for options backdating scheme that has been taking place in Comverse for some time. SEC alleged that the three executives had used the scheme to grant concealed in-the-money options to themselves and others by coinciding their dates to historically-low closing prices of Comverse common stock.
The settlement comes in $6 million worth of penalty, in addition to disgorgement and prejudgment interests worth more than $47.6 million that made up Alexander’s ill-gotten wealth, the SEC said. The white collar crime charges will also prohibit Alexander from further assuming any posts in any public companies.
The SEC said Comverse’s investors have been presented with misrepresented stock option grants and have not been informed that compensation expenses of these grants were not recorded. The backdating scheme, according to SEC, has led to an overstatement of Comverse’s net income and earnings per share from 1991 to 2005.
Alexander, on the other hand, did neither admit nor deny the charges of white collar crime against him.
SEC’s judgment, however, will need the concurrence of U.S. District Judge for the Eastern District of New York Honorable Nicholas G. Garaufis.
Meanwhile, the U.S. Attorney’s Office for the Eastern District of New York filed a separate civil case seeking to forfeit specific assets of Alexander, which will render the disgorgement and prejudgment interest duties satisfactory.
Noel Gittens, Pamela Kesner, Kevin Guerrero, Dwayne Brown, and trial counsel Suzanne Romajas, presided over the litigation of the white collar crime.