The US Securities and Exchange Commission has settled
civil fraud charges against David Kreinberg, former chief financial
officer of Comverse Technology.
Kreinberg is paying out almost $2.4m (£1.3m) and has agreed not
to act as a director or accountant in the future as part of the
settlement. However, Kreinberg was investigated for the way he
dealt with backdated stock options and still faces criminal charges
in a district court.
The commission had charged Kreinberg and two other former
Comverse executives in August this year, with taking part in a
fraudulent scheme to grant undisclosed options to themselves and to
others by backdating stock option grants to coincide with
historically low closing prices of Comverse common stock.
The commission also alleged that, from 1999 through to at least
April 2002, Kreinberg and Comverse's former chairman and chief
executive officer created a slush fund of backdated options that
the former chairman and chief executive officer used to recruit and
retain key personnel, with Kreinberg's knowledge.
Without admitting or denying the allegations of the SEC,
Kreinberg was able to settle the case. As part of the settlement,
Kreinberg has also agreed to cooperate with the SEC’s ongoing
litigation against others.
In the district court, Kreinberg has pleaded guilty to one
criminal count of conspiracy to commit securities fraud, mail
fraud, and wire fraud, and one criminal count of securities
fraud.
A number of US IT companies face ongoing SEC investigations into
the way they have dealt with stock option awards, including Apple
Computer.
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