The former general counsel of Comverse Technology, the voicemail software maker, has agreed to pay more than $3m to settle charges of options backdating with US securities regulators.
The move marks the first time a company’s former top lawyer has agreed to a settlement over backdating, but more than a dozen chief legal officers have lost their jobs because of the scandal. General counsels typically provide legal advice to their companies and their boards’ compensation committees.
William Sorin, who pleaded guilty in November to criminal charges stemming from the case, also agreed to a permanent ban on serving as a director of a public company. He neither admitted nor denied wrongdoing as part of the civil settlement. Mr Sorin’s lawyer could not be reached for comment.
The settlement comes as the Securities and Exchange Commission, the US securities regulator, is struggling to get to grips with the huge caseload arising from the apparently widespread practice of backdating.
Linda Thomsen, the SEC’s head of enforcement, said: “Today’s settlement signals that the Commission will vigorously pursue those responsible for backdating schemes wherever the investigation may lead, even, as appropriate, into the offices of corporate counsel.”
Her tough stance echoed earlier comments made by Christopher Cox, the SEC chairman, who pledged to “stamp out” backdating when he announced the first civil charges in connection with the practice in July.
More than 160 companies have come under scrutiny for possible improper backdating, but Comverse is one of just two companies whose top executives have been hit with criminal and civil charges.
Company boards have forced a number of chief executives to resign after they were found to have been aware of or to have engaged in backdating.