In one of the largest fines ever handed down to an individual charged with accounting fraud, a federal judge has ordered the former chairman and chief executive of Gemstar-TV Guide International Inc. to pay $22 million in penalties, interest and restitution.
Henry C. Yuen plans to appeal the ruling, handed down in Los Angeles federal court. In a civil trial in December brought by the Securities and Exchange Commission, Yuen was found guilty of securities fraud for inflating the company's revenues.
He was also barred from serving as an officer or director of a public company.
Yuen also pleaded guilty in October to criminal charges of obstructing a federal investigation.
The SEC had originally sought more than $60 million from Yuen -- asking the court to demand that he forfeit $15.7 million made in bonuses and trading profit during the fraud and to pay a civil penalty of the same size. The regulators also wanted Yuen to surrender the nearly $30 million he received in severance pay when he was fired as Gemstar's chief executive in November 2002. The severance pay remains frozen as part of a pending wrongful termination case brought against Gemstar by Yuen.
The fine levied by the Los Angeles judge covers $10.6 million Yuen received in bonuses and trading profits, plus a civil penalty of $10.6 million and $1.2 million in interest.
Gemstar's businesses include TV Guide magazine and the licensing of electronic television guides for set-top boxes . Both Yuen and chief financial officer Elsie Leung were forced out in late 2002 after the company was discovered to have inflated advertising sales since 1999. In 2004, Gemstar agreed to pay a $10 million civil penalty to settle charges that it had overstated revenues, and both Gemstar and auditor KPMG settled a class-action lawsuit brought by company shareholders for $67.5 million and $25 million, respectively.
