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To: shades who wrote (60068)	5/1/2006 5:59:59 PM
From: shades	Respond to of 110194

Comverse Execs Quit As Option-Timing Probe Continues>CMVT . By Rob Curran Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Three top Comverse Technology Inc. (CMVT) executives resigned on Monday in the wake of a stock-option timing scandal that prompted an ongoing review and financial restatements. While many observers expected the housecleaning, shares of Comverse rose sharply, as investors welcomed the news. Chairman and Chief Executive Kobi Alexander, Chief Financial Officer David Kreinberg, and General Counsel William Sorin stepped down as the telecom-equipment company pursues an internal investigation into stock options and races to complete related restatements before it's delisted from the Nasdaq. The former executives, whose resignation was effective immediately, will remain on hand as advisors. "In our view, these resignations bring the company closer to emerging from the [ongoing] internal review, as it fixes the scope of the damage to senior management and provides the company the opportunity to be led out of the issue by a management that was not directly involved," said Deutsche Bank analyst Tom Ernst. Ernst, who rates the company's shares at buy, said the resignations and any potential delisting from the Nasdaq won't affect the business significantly. Robert W. Baird analyst William Power said in a research note that the executive exodus "could be a positive for the stock .. to the degree that the previous management team acted fraudulently." Baird makes a market in Comverse. Shares of Comverse were recently up $1.37, or 6%, at $24.02 on volume of 7 million, compared with the daily average of 3.7 million. A March 18 article in The Wall Street Journal disclosed a statistical pattern of favorably timed grants to executives at Comverse and other companies. After an initial review, Comverse said it expects to restate more than five years of financial results, based on disparities between reported and actual option-grant dates. Wedbush Morgan analyst Scott Sutherland said there was no indication that the restatements would change revenue recognition, or have any material effect outside of the option reporting. Analysts said Comverse wouldn't suffer operationally from the departure of the three because the leaders of key units - such as Verint Systems Inc. (VRNT) - remain in place. "In a growing market, they still have execution and expertise," said Sutherland, who doesn't own any shares or have any conflicts to report. The risk of a formal or an informal Securities and Exchange Commission probe into the stock-options remains, however. The company named directors Ron Hiram and Raz Alon as nonexecutive chairman and chief executive, respectively, to replace Alexander, a founder of Comverse. Wedbush Morgan's Sutherland noted that Alon has adequate experience and possesses, like his predecessor, "Wall Street financial savvy." "I continue to hear from industry contacts that they're doing very well in the market - they have good products and are winning several deals," Sutherland said. -By Rob Curran, Dow Jones Newswires; 201-938-5176; robert.curran@dowjones.com (END) Dow Jones Newswires May 01, 2006 13:14 ET (17:14 GMT) Copyright (c) 2006 Dow Jones & Company, Inc.- - 01 14 PM EDT 05-01-06