A federal judge has ordered Henry Yuen, former chief executive officer of Gemstar-TV Guide International, to pay $22 million to settle civil charges stemming from his role in the company’s accounting scandal, according to published reports.
The sum includes penalties, interest and a return of ill-gotten gains, reported Reuters. According to The Wall Street Journal, this is one of the largest civil penalties ever obtained by the Securities and Exchange Commission against an individual in an accounting fraud case.
U.S. District Judge Mariana Pfaelzer also barred Yuen from serving as an officer or a director of a public company, reported the Journal.
“This is a case of intentional deception and fraud,” said Randall Lee, director of the SEC’s Los Angeles office, according to the newspaper. “Yuen’s profits while he was carrying out this fraud were phenomenal by any definition.”
Yuen and former chief financial officer Elsie Leung were accused of inflating revenue by $250 million from March 2000 through September 2002 to meet revenue projections and boost the company’s stock. Leung settled with the SEC in February, agreeing to disgorge $600,000 and pay $750,000 in civil penalties.
In October, according to Reuters, Yuen agreed to plead guilty to separate criminal charges of obstructing a federal investigation, admitting he destroyed documents sought by the SEC, which was investigating accounting irregularities at Gemstar. Under the plea deal, Yuen would reportedly have served six months in home detention and two years on probation, paid a fine of $250,000, and donated $1 million to charities helping low-income victims of fraud. The judge in that case refused to approve the deal, added the wire service, because he considered it too lenient.
The Los Angeles Times reported that according to an SEC attorney, the findings by Judge Pfaelzer might be used to bring additional criminal charges against Yuen.
Yuen’s attorney, Stanley Arkin, told the Associated Press that Monday’s verdict and judgment will be appealed. “We’ve always taken the position that Henry Yuen never did anything to deliberately defraud investors and everything he did had been approved by professionals or fellow board members,” Arkin reportedly stated.