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The company's board questions the timing of stock option grants amid wider regulatory scrutiny of the issue by the SEC.
Stephen Taub, CFO.com | US
May 1, 2006
Officials at Comverse Technology Inc. announced that the company's finance chief and two other top executives have resigned in the wake of an internal investigation into the timing of certain stock option grants.
The three executives are David Kreinberg, who had served as CFO; Kobi Alexander, the former chairman and CEO; and William Sorin, a former director, senior general counsel, and corporate secretary. The trio agreed to become advisors on an interim basis and cooperate with a special board committee that is reviewing the grants.
The slots left vacant by the departing executives were immediately filled. Avi Aronovitz, currently vice president of finance and treasurer, was named interim CFO of Comverse. Meanwhile, Ron Hiram, an independent director since 2001, was appointed non-executive chairman, and Raz Alon, an independent director since 2003, was named interim CEO. Paul Robinson, currently a vice president for legal matters and general counsel, will assume the roles of executive vice president, chief administrative officer, general counsel, and corporate secretary.
Fortuitous timing of option grants at about a dozen companies reportedly has been the subject of scrutiny by the Securities and Exchange Commission since last November, though there is no evidence that Comverse is one of the companies being eyed in that probe.
In March, Comverse announced that it might have to restate financial results, although officials had not yet determined which years would be affected. At the same time, the company noted that a special committee of its board would review such matters as "the accuracy of the stated dates of option grants and whether all proper corporate procedures were followed."
Verint Systems Inc., which is majority-owned by Comverse, also announced on Friday that Kreinberg, Alexander, and Sorin resigned from its board. All three served on the compensation committee and executive committee, while Alexander also served as board chairman.