Fled before indictment. Alexander
צילום: רויטרס
Comverse settles civil backdating case for $225 mln
Lawyers representing investors say ex-CEO Alexander, who fled to Namibia, contributes $60 million to settlement, the second-largest in a backdating-related civil suit
Comverse Technology Inc (CMVT.PK) settled a class action lawsuit over stock options backdating on Thursday for $225 million, with ex-CEO Jacob "Kobi" Alexander, who fled to Namibia, contributing $60 million, lawyers representing the investors said.
The settlement is the second-largest in a backdating-related civil suit, and represents one of the largest payouts by a former executive in a federal class action, the law firm said.
A Comverse spokesman could not be reached for comment.
The settlement comes about six months after Comverse settled a US Securities and Exchange Commission lawsuit accusing the New York-based software company of improper backdating of stock options and other accounting practices.
Comverse did not admit or deny the allegations and did not pay any penalties in that settlement.
The civil lawsuit, filed in New York federal court, was led by the Menora Group, an Israel-based insurance company and pension fund, and includes investors who held Comverse shares between April 30, 2001, and Jan. 29, 2008, attorney Patrick Dahlstrom of Pomerantz Haudek Grossman & Gross said in a statement.
The firm expects to file the preliminary settlement agreement with the court immediately, the statement said.
Comverse's chief financial officer pleaded guilty in 2006 to helping Alexander backdate options and conceal the practice from the company's board of directors.
Alexander fled shortly before he was indicted and was arrested in 2006 in Namibia following an international manhunt. He is now fighting extradition to the United States in Namibian courts.
Backdating involves setting a stock option price at a date in the past rather than the date it is issued and is legal when companies account for the price disparity in their books.
A government crackdown on backdating starting in 2006 touched about 170 companies, resulting in dozens of resignations of US executives, dozens of SEC civil cases, and a handful of guilty pleas to related criminal charges.
