SEC Press press_release 7 KB 3,453 chars

Press Release: David Kreinberg, Former CFO of Comverse Technology, Inc., Agrees to Settle SEC Charges in Options Backdating Case; 2006-180; Oct. 24, 2006

Release: 2006-180
Caption: Securities and Exchange Commission v. David Kreinberg, et al.

summary

David Kreinberg, former CFO of Comverse Technology, settled SEC charges and pled guilty to criminal counts of conspiracy and securities fraud for orchestrating a years-long stock option backdating scheme that generated nearly $1 million in illicit gains, resulting in a $2.4 million penalty, permanent ban from serving as officer or director, and suspension from practicing before the SEC.

paragraph

David Kreinberg, former CFO of Comverse Technology, agreed to settle SEC charges for participating in a fraudulent scheme to backdate stock options to coincide with historically low stock prices, granting undisclosed in-the-money options to executives and others between 1999 and 2002. He consented to pay $2,394,917.68 in total—comprising $1,769,255.80 in disgorgement (including $989,434 in illicit gains from exercised options) and $625,661.88 in prejudgment interest—along with a permanent injunction, officer-and-director bar, and suspension from practicing before the SEC. In a parallel criminal proceeding, Kreinberg pled guilty to one count of conspiracy to commit securities, mail, and wire fraud, and one count of securities fraud, while agreeing to cooperate with ongoing investigations.

narrative

David Kreinberg, former CFO of Comverse Technology, was implicated in a years-long fraudulent scheme to backdate stock option grants to coincide with historically low stock prices, thereby granting undisclosed in-the-money options to himself and other executives from 1999 through at least April 2002. The SEC charged him with violating multiple federal securities laws, including antifraud, reporting, record-keeping, and Sarbanes-Oxley provisions, leading to a settlement requiring him to pay $2,394,917.68 in disgorgement and prejudgment interest—$989,434 of which represented the direct financial benefit from exercised backdated options. As part of the settlement, Kreinberg accepted a permanent injunction, a lifetime ban from serving as an officer or director of a public company, and suspension from appearing or practicing before the SEC as an accountant, without admitting or denying the allegations. In a separate but parallel criminal case, he pled guilty to one count of conspiracy to commit securities, mail, and wire fraud, and one count of securities fraud, under an agreement with the U.S. Attorney’s Office for the Eastern District of New York. Kreinberg also agreed to cooperate with the SEC’s ongoing investigation into other former Comverse executives. The SEC acknowledged the critical assistance of the U.S. Attorney’s Office and the FBI, which conducted their own independent investigations leading to the criminal charges. The settlement remains subject to approval by the U.S. District Court for the Eastern District of New York.

Enriched metadata

Scheme: financial-fraud (100%)
Court: Eastern District of New York
Outcome: pleaded
Disgorgement: $2,394,918

Classified financial-fraud(confidence 100%). EDGAR detection: forms 10-K/10-Q/8-K/NT 10-K· recall 67% / precision 23%. detection rule →

Extracted insights

Dollar amounts 6

$2.40M $2.4 Million $1M–$10M
$2.40M $2.4 million $1M–$10M
$2.39M $2,394,917 $1M–$10M
$1.77M $1,769,255 $1M–$10M
$989K $989,434 $100K–$1M
$626K $625,661 $100K–$1M

Entities 8

person David Kreinberg
agency Federal Bureau of Investigation
company former cfo of comverse technology, inc.
scheme_term one count of conspiracy to commit securities fraud, mail fraud, and wire fraud
scheme_term one count of securities fraud
agency Securities and Exchange Commission
scheme_term separate parallel investigation into securities fraud
court united states district court for the eastern district of new york

Triples 13

David Kreinberg is Former CFO Of Comverse Technology, Inc.
SEC settled charges against David Kreinberg
David Kreinberg agreed to pay $2,394,917.68 In Disgorgement And Prejudgment Interest
David Kreinberg received Permanent Officer-And-Director Bar
SEC charged David Kreinberg And Two Other Former Comverse Executives
David Kreinberg engaged in Fraudulent Scheme To Backdate Stock Option Grants
David Kreinberg And Comverse's Former Chairman And CEO created Slush Fund Of Backdated Options From 1999 Through April 2002
David Kreinberg pled guilty to One Count Of Conspiracy To Commit Securities Fraud, Mail Fraud, And Wire Fraud
David Kreinberg pled guilty to One Count Of Securities Fraud
David Kreinberg is required to pay $1,769,255.80 In Disgorgement
David Kreinberg is required to pay $625,661.88 In Prejudgment Interest
Settlement subject to approval of United States District Court For The Eastern District Of New York
FBI conducted Separate Parallel Investigation Into Securities Fraud

View original SEC press releasesec.gov

Extracted body text (3,453c)

David Kreinberg, Former CFO of Comverse Technology, Inc., Agrees to Settle SEC Charges in Options Backdating Case Relief Includes Officer-and-Director Bar and Nearly $2.4 Million in Disgorgement and Interest FOR IMMEDIATE RELEASE 2006-180 Washington, D.C., Oct. 24, 2006 - The Securities and Exchange Commission today settled civil fraud charges against the former Chief Financial Officer of Comverse Technology, Inc., David Kreinberg, under an agreement which provides for the payment of nearly $2.4 million in disgorgement and prejudgment interest, a permanent injunction, a permanent officer-and-director bar, and suspension from appearing or practicing before the Commission as an accountant. The Commission charged Kreinberg and two other former Comverse executives on Aug. 9, 2006, with, among other things, engaging over many years in a fraudulent scheme to grant undisclosed in-the-money options to themselves and to others by backdating stock option grants to coincide with historically low closing prices of Comverse common stock. The Commission also alleged that, from 1999 through at least April 2002, Kreinberg and Comverse's former Chairman and Chief Executive Officer created a slush fund of backdated options that the former Chairman and Chief Executive Officer, with Kreinberg's knowledge, used to recruit and retain key personnel. Without admitting or denying the allegations of the Commission's complaint, Kreinberg consented to the entry of a final judgment permanently enjoining him from violating or aiding and abetting violations of the antifraud, reporting, record-keeping, internal controls, false statements to auditors, Sarbanes-Oxley certification, and securities ownership reporting provisions of the federal securities laws. He is required to pay $1,769,255.80 in disgorgement, of which $989,434.00 represents the "in-the-money" benefit from exercises of backdated option grants. In addition, Kreinberg will pay $625,661.88 in prejudgment interest on the full disgorgement amount, for a total of $2,394,917.68. As part of the settlement, Kreinberg also has agreed to cooperate in the Commission's ongoing litigation. The settlement is subject to the approval of the United States District Court for the Eastern District of New York. In a separate matter also filed in the United States District Court for the Eastern District of New York, Kreinberg today pled guilty to one criminal count of conspiracy to commit securities fraud, mail fraud, and wire fraud, and one criminal count of securities fraud. The plea was the result of an agreement between Kreinberg and the United States Attorney's Office for the Eastern District of New York. The Commission would like to acknowledge the ongoing assistance of the United States Attorney's Office for the Eastern District of New York and the Federal Bureau of Investigation, which conducted their own separate, parallel investigation resulting in distinct criminal charges. The Commission's investigation in this matter is continuing. # # # For more information, contact: Antonia Chion Associate Director (202) 551-4842 Division of Enforcement U.S. Securities and Exchange Commission Christopher R. Conte Associate Director (202) 551-4834 Division of Enforcement U.S. Securities and Exchange Commission Additional materials: Press Release 2006-137; Litigation Release Nos. 19796 and 19878 http://www.sec.gov/news/press/2006/2006-180.htm Home | Previous Page Modified: 10/24/2006

OCR text (3,453c · plain-text · 99% conf)