Comverse execs arrested for alleged stock option fraud


Comverse execs arrested for alleged stock option fraud

Antony Savvas

Three former senior executives at Comverse Technology, a billing systems provider, are facing fraud charges connected to stock option awards.

It is the latest action by the US authorities to clamp down on alleged stock option frauds at large IT companies.

Three former Brocade executives were recently charged for alleged frauds, and a number of other companies are facing stock option investigations.

Former Comverse finance head David Kreinberg and former senior general counsel William Sorin have surrendered to the FBI, and Comverse co-founder and former chief executive Kobi Alexander has an arrest warrant out for his arrest.

The US Department of Justice has seized more than $45m (£25m) from two investment accounts in Alexander's name.

All three men left the company this May after the company disclosed it was investigating stock option grants.

The Securities and Exchange Commission (SEC) has also filed civil fraud charges against the three. The SEC alleges the three manipulated stock option grant dates.

The award date for stock options can be manipulated or backdated to allow the recipient to get the best share price for their award.

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