William Sorin becomes the first corporate officer to be sentenced to jail in the options backdating scandal.
Chris Cox is looking for the SEC to quickly wrap up the remaining open cases.
Ex-Comverse Lawyer Going to Jail in Options Backdating Plan
By REUTERS
Published: May 11, 2007
The former top lawyer at the software maker Comverse Technology was sentenced yesterday to a year and one day in prison for his role in a stock options backdating scheme, becoming the first corporate executive to be sentenced for options-related crimes.
The company’s former general counsel, William F. Sorin, had pleaded guilty in Federal District Court in Brooklyn to conspiracy to commit securities fraud, mail fraud and wire fraud as part of a plea agreement.
Mr. Sorin, 58, and two other Comverse executives were accused of reaping millions of dollars in profits by altering the grant dates of stock option awards from 1998 to 2002 to improve gains available to themselves and favored employees.
Among those accused in the case is the former chief executive Jacob Alexander, who is considered a fugitive. and is in Namibia as that government considers a United States extradition request.
The former chief financial officer, David Kreinberg, has also pleaded guilty to conspiracy and securities fraud. He awaits sentencing.
The judge also ordered Mr. Sorin to pay $51.8 million in restitution, the government’s estimate of the total losses incurred by the company through the overall backdating activity.
nytimes.com
SEC close to moving option cases says Cox
Wed Apr 25, 2007 2:24PM EDT
By Elena Moya
LONDON (Reuters) - The U.S. Securities and Exchange Commission expects to wrap up many of its stock options dating cases within weeks, SEC Chairman Christopher Cox told Reuters on Wednesday.
The agency has been investigating about 130 companies suspected of manipulating the dates of stock option grants to benefit executives. The Justice Department and the Internal Revenue Service are also involved in some cases.
"We are working on procedures to move many of the cases very quickly," Cox said, adding their resolution would be within "weeks."
Cox spoke in an interview after holding a news conference to discuss cooperation between the SEC and European securities regulators in sharing information.
The SEC chairman gave no indication of whether the options cases would be resolved through settlements, lawsuits or a combination of both.
Companies can run afoul of U.S. securities laws if they fail to properly handle disclosure, accounting and tax treatment of stock options.
On Tuesday, the SEC said it filed a lawsuit against Apple Inc.'s (AAPL.O: Quote, Profile, Research former general counsel for allegedly backdating stock options. The agency also settled with Apple's former chief financial officer, who agreed to pay about $3.5 million in fines and disgorgement of profits, but without admitting any wrongdoing.
In other high-profile options dating cases, the Justice Department filed criminal charges last summer against former executives at Comverse Technology Inc. (CMVT.PK: Quote, Profile, Research and Brocade Communications Systems Inc. (BRCD.O: Quote, Profile, Research.
Cox declined to comment on any specific companies.
"A handful of issues were novel but upon their resolution" the process will accelerate, Cox said. "We're very close to moving forward in the resolution of those key principles."
The SEC previously said it would examine the duration of the options dating misconduct at a company, the number of instances of backdating, the amount of compensation charges, and whether a company has already restated its financial data to account for the options grant date changes.
"Our intention is to resolve the issue of backdating in general as permanently as possible," Cox said.
"We'd like to put it behind us. Undoubtedly there will be hard-core violators that will persist but we have every reason to believe that what went on in such broad fashion in the late 1990s need not occur ever again," he added.
reuters.com |
