Jonathan B. Orlick, former general counsel of Gemstar-TV Guide International Inc., was barred from serving as an officer or director of a public company for 10 years and agreed to pay more than $305,000 to settle charges brought against him by the Securities and Exchange Commission for his alleged role in helping the firm overstate revenue by more than $248 million over a three-year period.
Without admitting or denying the SEC's charges, Orlick agreed to be barred from violating federal securities laws and to be suspended from appearing or practicing before the SEC as an attorney.
The SEC said that it will seek to have the money -- of which $150,000 was disgorgement of a portion of his bonus, $150,000 was a civil penalty, and $5,511 was interest -- included in a fund established for harmed Gemstar shareholders.
The SEC's complaint, filed in federal court in Los Angeles, alleges that from June 1999 through September 2002, Gemstar overstated revenues by at least $248 million to meet its projections for revenue growth from interactive program guide licensing and advertising. The agency alleges that Orlick knew, but omitted to disclose, that Gemstar was improperly recognizing and reporting material amounts of licensing revenue from two companies, and that he repeatedly signed false management representation letters to Gemstar's auditors regarding the status of negotiations with one of the companies.
The SEC's complaint said that Orlick failed to disclose material information regarding certain of Gemstar's IPG revenue. The complaint charges Orlick with securities fraud, falsifying Gemstar's books and records, aiding and abetting Gemstar's reporting and record-keeping violations, and lying to auditors.
Gemstar agreed in June 2004 to pay a $10 million civil penalty to settle SEC charges against it. Former Gemstar co-president Peter C. Boylan agreed to pay $600,000 to settle an SEC action against him last August. In October, the SEC sanctioned KPMG LLP, two former partners and a current partner and senior manager for improper professional conduct in connection with audit failures involving licensing and advertising revenue in the past audits of Gemstar-TV Guide International Inc. The SEC has a pending lawsuit against some other former Gemstar executives, including former CEO Henry C. Yuen.
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