The Securities and Exchange Commission has settled civil fraud charges against the former chief financial officer of Comverse Technology Inc., part of a case that is one of the agency’s first involving options backdating.
David Kreinberg agreed to cooperate with the commission’s ongoing litigation as well as pay nearly $2.4 million in disgorgement, fines and interest. He will also be barred from serving as an officer or director of a public company, and be suspended from appearing in front of the SEC as an accountant.
The SEC had charged Kreinberg and two other former Comverse executives in August with engaging in a scheme to grant undisclosed options to themselves and others by backdating stock option grants to coincide with low closing prices of Comverse common stock.
The SEC also accused Kreinberg and Comverse's former chairman and chief executive Kobi Alexander of creating a slush fund of backdated options that Alexander used to recruit and retain key personnel.
Alexander, who was labeled a fugitive by the Federal Bureau of Investigation in late July, was discovered to be living in the capital of Namibia last month and is now in custody while the Justice Department prepares extradition papers.
In a separate matter also filed in the United States District Court for the Eastern District of New York, Kreinberg also pleaded guilty to one criminal count of conspiracy to commit securities fraud, and one criminal count of securities fraud.
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