Charges were announced that August against himself, William Sorin, Comverse's general counsel, and David Kreinberg, its finance chief.
The bulk of the derivative lawsuit settlement consists of the previously disclosed agreement of Comverse’s former CEO Kobi Alexander to pay Comverse million to be applied to the class action lawsuit settlement.
While no lawsuit has been launched, many experts, including H.
David Sherman, a former SEC academic fellow and currently a professor of accounting at Northeastern University, says the audit firm was partially to blame for the not catching the fraud scheme, which lasted more than five years.
“Central to the alleged fraud was a stock option backdating scheme, in which Comverse granted undisclosed ‘in-the-money’ stock options to its employees by backdating its stock option grants,” noted court documents.
In addition, the investor suit accused Alexander and Kreinberg of funneling some of the backdated options into a hidden “slush fund” from which they then granted options to several Comverse employees.
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Alexander, who became a fugitive from the FBI when he allegedly fled the U. for Namibia, where he is living today, filed a law suit separate from Sorin’s suit against Deloitte in federal District Court in Brooklyn, N. In the complaints, Alexander and Sorin said that if they are held liable in the backdating case, Deloitte & Touche should bear some responsibility for damages, according to Knight Ridder/Tribune.