Former Comverse Exec Settles Options Backdating Case
The former general counsel of software maker Comverse Technology has agreed to pay more than $3 million to settle an options backdating case with the U.S. Securities and Exchange Commission, the agency said this morning.
William Sorin also agreed to a permanent bar from acting as an officer or director of a public company, the SEC said.
He agreed to the settlement without admitting or denying the charges. A lawyer for Sorin did not immediately return calls for comment.
Comverse is one of two high-technology companies, along with Brocade Communications Systems, whose executives have faced SEC charges in the recent stock option backdating scandal that has put more than 130 companies under SEC scrutiny.
"Today's settlement signals that the commission will vigorously pursue those responsible for backdating schemes wherever the investigation may lead, even, as appropriate, into the offices of corporate counsel," said SEC enforcement director Linda Chatman Thomsen in a statement.
In August, the commission said it had brought fraud charges against Sorin and Comverse's former chief executive, Kobi Alexander, and former finance chief, David Kreinberg, for manipulating stock option grant dates.
Criminal charges were announced the same day.
Sorin and Kreinberg surrendered to the FBI immediately, and Alexander was captured in September in Namibia.
As part of his SEC settlement, Sorin agreed to surrender $1.67 million in ill-gotten gains and pay a $600,000 civil penalty and $817,509 in prejudgment interest.
In November, Sorin pleaded guilty to one criminal count of conspiracy to commit securities fraud, mail fraud and wire fraud as part of a plea agreement.
Sorin and other executives were accused of reaping millions of dollars in profits by altering the grant dates of stock option awards from 1998 to 2002 to boost gains available to themselves and favored employees.
The SEC said Sorin had created company records that falsely indicated Comverse's compensation committee had approved an option grant on a date when no such action had taken place.
Sorin created similar false records at Ulticom, another public company majority-owned by Comverse, the SEC said.
Ulticom has said it was in the process of restating its historical financial statements for option grant accounting.
The SEC said it is continuing to investigate the Comverse case.
The stock option backdating scandal has ensnared almost 200 companies, according to company disclosures that have revealed internal investigations as well as probes by the SEC, Internal Revenue Service and Justice Department.
SEC Chairman Christopher Cox, speaking at the Reuters Regulation Summit in Washington earlier this week, said the investigations were proceeding at a normal pace and more charges would be filed.