Human Capital & Careers

Ex-Comverse CFO Expected to Plead Guilty

Kreinberg may become a government witness against former Comverse CEO Kobi Alexander
Stephen TaubOctober 24, 2006

David Kreinberg, the former chief financial officer of Comverse Technology is planning to plead guilty for the role he played in the company’s stock option backdating case, according to several wire services.

The case docket referencing Kreinberg and a hearing scheduled for Tuesday carried the notation “Guilty Plea,” reported Bloomberg. The wire service speculates that Kreinberg, who resigned in May, may become a government witness against former Comverse chief executive officer Jacob “Kobi” Alexander. The government is trying to extradite Alexander from Namibia to face 32 charges.

“Given the nature of the investigation and the timing of the plea, I would assume that his pleas agreement will include a requirement of cooperation,” Scott Christie, a former U.S. prosecutor, told Bloomberg. “Often the most favorable plea terms are given to the person who pleads first and cooperates.”

Former general counsel William Sorin, who along with Kreinberg and Alexander was charged with one count of conspiracy, has been discussing a plea with prosecutors, added Bloomberg. The three individuals are accused of backdating the grants of stock options in order to reap larger gains.

Kreinberg personally profited $1 million by exercising stock options that had been wrongly backdated, according to Reuters. Kreinberg and Sorin have been free on $1 million bail since they were arrested in August.

Bloomberg said Kreinberg’s lawyer Matthew Lang did not return a call seeking comment. The wire service counts more than 140 U.S. companies having disclosed internal or federal investigations into backdating.