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US authorities on Wednesday accused three former executives at Comverse Technology, a maker of voicemail software, of engaging in a “long-running scheme” to manipulate the grant dates of stock options.
The charges mark the second time in three weeks that the US government has charged executives of illegally manipulating the timing of stock options grants.
Jacob Alexander, Comverse’s former chief executive, and two other former top managers face charges of securities fraud.
Mr Alexander, together with David Kreinberg, the company’s former chief financial officer, and William Sorin, former general counsel, are alleged to have benefited personally from a scheme to change the grant dates of stock options to coincide with low points in the value of a company’s shares.
Mr Kreinberg and Mr Sorin surrendered on Wednesday to FBI agents in New York.
US authorities are investigating more than 80 companies whose managers may have improperly inflated the value of stock options by changing their grant dates to coincide with low points in the value of their companies’ shares.
The scandal has shocked boardrooms across the country and has led several companies to restate financial results to the tune of billions of dollars.
Comverse’s shares fell almost 15 per cent in March after it said it would be forced to revise several years of financial results following an internal investigation into its options-granting practices.
Mr Alexander, Mr Kreinberg and Mr Sorin resigned the following month.
The government’s criminal complaint said that Mr Alexander and Mr Kreinberg created a secret options slush fund, hidden from shareholders and auditors, which they used to award stock options to favoured employees.
The scheme began to unravel in March, after the Wall Street Journal published an article detailing suspicious stock options grants at Comverse and a handful of other companies.
Last month, the government charged two former executives at Brocade Communications Systems, a networking equipment maker, with securities fraud for their role in an alleged backdating scheme.
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