The Securities and Exchange Commission has told a federal judge the Justice Department was too lenient in striking a plea deal with the former chief executive of Gemstar-TV Guide International.
Under the deal, Henry Yuen would spend six months in home detention for obstructing the SEC's investigation into a $248 million accounting fraud at Gemstar. He also agreed to make a $1 million charitable contribution, pay a $250,000 fine and receive three years of probation.
Judge John F. Walter of U.S. District Court in Los Angeles will withhold approval of the plea deal until Jan. 23. Yuen faces a maximum of five years in prison.
The public disagreement is a rare one between the SEC and the Justice Department, two agencies who have worked closely together on prosecuting a number of high profile, white-collar cases in recent years.Gemstar's businesses include TV Guide magazine and electronics licensing. 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.
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