Former Comverse CFO pays out £1.3m
The US Securities and Exchange Commission has settled civil fraud charges against David Kreinberg, former chief financial officer of Comverse Technology.
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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