Comverse backdating settlement 2 piece accomodating iol
Alexander then personally doled out the options, with Kreinberg’s advice and consent, to the employees he favored.Compounding the scheme were the misleading statements made about the options in the company’s public filings, including its proxy statements and annual reports.Later these were transferred to a fictional internal account of I. Fanton which supposedly stood for ‘Phantom Of the Opera’.This allowed CEO and founder of Comverse Inc Alexander to transfer the stock options to himself and some other employees within the conspiracy thus earning huge profits and decieving shareholders and potential shareholders clearly showing that the intent was to commit a fraud and that intention was satisfied.The main ethical aspect surrounding backdating seems to be related to the disclosure of backdating details and whether the accounts are clear and transparent.As long as the intent is not to decieve or commit fraud and earn a fast buck backdating is perfectly legal.Thus the parties affected were clearly the company its employees ,shareholders and board members whose money was clearly being swindled.
2 of the top executives apart from the CEO pleaded guilty to securities fraud , mail fraud , wire fraud and conspiracy and it has come to light that stock options were backdated and granted to fictional employees.
The general counsel, who was also in on the scheme, drafted and signed off on the reports.( Options run out at Comverse, Richard Duprey (2006)) While they arrested 2 of the executives CFO David Kreinberg and former General Counsel William Sorin the kingpin of the racket CEO Jacob “Kobi” Alexander fled the police and was later tracked down to Sri Lanka leading to high drama.
He is currently in Namibia in prison facing extradition charges.
However this scandal has had a long term effect on the company and it is still recovering from the blow that it suffered during the investigations and subsequent convictions of its executives.
The Comverse Background story The Comverse Backdating scheme by three of the company’s top executives started coming apart in March of 2005 when a reporter called the CEO Jacob “Kobi” Alexander asking how it was that all options grants were made at a time when there was a sharp dip in stock prices of Comverse Technology Inc.