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The company has been reeling since revelations of stock-option backdating surfaced more than a year ago.
Stephen Taub, CFO.com | US
May 23, 2007
Comverse Technology disclosed that the Nasdaq Stock Market will delist its common stock, effective June 1.
The company, which has been reeling since revelations of stock-option backdating first surfaced more than a year ago, was suspended from trading on the Nasdaq on February 1. The suspension followed Comverse's failure to file timely financial reports for several quarters, according to Newsday.
In May 2006, three former top executives — Kobi Alexander, founder and the former chairman and CEO; David Kreinberg, former CFO; and William Sorin, former director, senior general counsel, and corporate secretary — resigned in the wake of an internal investigation into the timing of stock-option grants. That summer, they were charged with fraud by federal prosecutors.
In October, Kreinberg pleaded guilty to securities fraud and conspiracy to commit securities fraud, mail fraud, and wire fraud. He also settled civil charges with the Securities and Exchange Commission, agreeing to pay nearly $2.4 million in disgorgement and prejudgment interest, to be suspended from appearing or practicing before the SEC as an accountant, and to be barred from serving as an officer or director of a public company.
In November, Sorin pleaded guilty to a single criminal count of conspiracy to commit securities fraud, mail fraud, and wire fraud. Earlier this month, Sorin became the first executive involved in the backdating scandal to receive prison time. He was sentenced to one year and one day in prison, plus three years' supervised release, and is scheduled to report on August 15, according to the Associated Press.
Alexander fled the country and in September 2006 was arrested in Namibia. Since then, U.S. authorities have been seeking his extradition to face 35 criminal counts. An extradition hearing is set for June 8, according to Newsday.