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The former top lawyer of Comverse was Thursday sentenced to a year and one day behind bars for his role in options backdating at the voicemail software company.
The news marked the first time a former top executive has received jail time over the backdating scandal.
William Sorin, 58, had pleaded guilty to one count of conspiracy to commit securities fraud, mail fraud and wire fraud as part of a plea deal with federal prosecutors. In addition to his prison term, Mr Sorin was ordered to pay almost $52m in restitution.
His jail sentence was the latest sign that federal authorities are treating the intentional manipulation of options grants by top executives as a serious crime.
More than 200 companies have become embroiled in backdating, in which the grant dates of stock options are moved back using hindsight in order to inflate their value. Although backdating itself is not illegal, it can fall foul of securities law and accounting rules if it is not disclosed to shareholders.
Mr Sorin was one of three former executives to be charged over backdating at Comverse.
David Kreinberg, Comverse’s former chief financial officer, is awaiting sentencing after reaching a similar plea deal. Kobi Alexander, Comverse’s founder and former chief executive, is fighting extradition from Namibia to the US, where he faces a number of charges including securities fraud. He has vowed to fight the charges if returned to the US. He could face more than 20 years in jail if convicted.
The three men were alleged to have reaped millions in ill-gotten gains as part of a “long-running scheme” to manipulate the grant dates of stock options at the company.
The scandal forced Comverse to restate its earnings to the tune of millions of dollars.
Mr Sorin’s attorney said Mr Sorin was ”among the finest people I have ever stood up for in the courtroom and that made it a very sad day”.
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