Comverse Kobi Coughs Up $54M
Jacob 'Kobi' Alexander, the disgraced former chairman and CEO of Service Provider Information Technology (SPIT) specialist Comverse Technology Inc. (Nasdaq: CMVT), has agreed a US$53.6 million settlement with the Securities and Exchange Commission (SEC) related to the stock options backdating scandal at the telecom software firm. (See Ex-Comverse CEO Settles With SEC.)
Alexander, recently named as a Light Reading Hall of Fame inductee, is forfeiting $47.6 million, which the SEC alleges is the value of his "ill-gotten gains," and is paying a $6 million penalty. (See Light Reading's Hall of Fame: The First Five.)
While Alexander is still not admitting or denying the charges against him, the SEC stated that the settlement "concludes one of our earliest stock option backdating cases and one of the most egregious attempts to cover up and avoid responsibility for options backdating fraud."
The settlement doesn't mean Alexander is off the hook, though. Criminal charges against him have not been dropped, so he is still facing extradition from Namibia, where he has been living since 2006. He was arrested in the west African country in September 2006, but released on bail. (See Cops Catch 'Most Wanted' Ex-CEO.)
And, of course, the settlement won't help Comverse much either. The actions of Alexander and his cronies left the company not only with a mark against its name but also years of financial reports to audit and refile, a process that has cost hundreds of millions of dollars and left the once-thriving company in severe financial difficulty.
The financial pressure currently faced by Comverse Technologies (the parent company of a number of telecom-related vendors) has forced it to sell one of its subsidiaries and seek buyers for other parts of its business. (See Ulticom Agrees $90M Sale and Au Revoir, NetCentrex?.)
Despite such difficulties, the company is still one of the largest players in the telecom software market. Its largest unit, Comverse Inc. (Nasdaq: CNSI), generated revenues of $925 million in its most recently reported financial year (to January 2009), and is still adding new customers and developing new capabilities. (See Comverse Tackles Policy Management, TMN Rolls Out Visual Voicemail, Cycle30 Uses Comverse's BSS, PLUS Picks Comverse, and Comverse Offers Hosted IP Comms.)
Comverse Technologies is set to issue its full-year financial report for the 12 months ending January 2010 within the next two months.
— Ray Le Maistre, International Managing Editor, Light Reading