Comverse technology backdating scandal
The bulk of the derivative lawsuit settlement consists of the previously disclosed agreement of Comverse’s former CEO Kobi Alexander to pay Comverse million to be applied to the class action lawsuit settlement.
The derivative lawsuit stipulation of settlement (which can be found here), is dated December 17, 2009, the same day as the class action lawsuit settlement was announced.
The company’s former CFO, David Kreinberg, agreed to pay ,000 for the benefit of Comverse, in addition to the .39 million he previously paid to the SEC.
Kreinberg also agreed to relinquish his counterclaims for .3 million in damages relating to deferred compensation, lost wages, and cancelled or revoked options or restricted stock, as well as an additional million in attorneys’ fees for which he had been seeking indemnification.
Comverse’s auditor during the time of the backdating scheme, Deloitte & Touche, agreed to pay the company 5,000.
In a December 28, 2009 press release (here), the plaintiffs’ lawyers announced the settlement of the Comverse Technology options backdating-related derivative lawsuit.
This derivative lawsuit settlement is separate from, but related to, the previously announced 5 million settlement of the Comverse Technology options backdating-related securities class action lawsuit (about which refer here).
Alexander, as readers will no doubt recall fled to Namibia to evade options backdating charges, where he remains a fugitive.Due to his absence in Namibia, the arrangements for his payment of the million are complicated, and are set out in a separate agreement (here).The company’s former General Counsel, William Sorin (who previously pled guilty to options backdating related criminal charges), also agreed to make two payments for the benefit of Comverse totaling million, in addition to the more than million he previously paid to the SEC.He also agreed to relinquish his counterclaims against Comverse seeking .2 million in damages relating to deferred compensation, lost wages and cancelled or revoked options and restricted stock.
The settlement consists of a number of different components, the most significant of which is Alexander’s agreement to pay the million to Comverse.As reflected in the company’s December 18, 2009 filing of Form 8-K (here), Alexander is to pay the million into the derivative settlement fund and then the amounts are to be transferred to the class action settlement fund.