Prison Sentence For Ex-Comverse Executive
Former senior general counsel, William Sorin, was found guilty in options backdating case.
Comverse Technology's former top attorney is the first executive to be sentenced to prison for his involvement in stock options backdating scandals. William F. Sorin, the firm's former senior general counsel, was sentenced to a year and a day in Federal District Court on a variety of charges connected to options backdating.
According to court documents, Sorin and former Comverse CEO Jacob "Kobi" Alexander used a "secret slush fund" they called "I.M. Fanton" to backdate options that were then distributed to favored employees.
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Charges leveled by the Securities and Exchange Commission stated that "Sorin created company records that falsely indicated that Comverse's compensation committee had approved a grant of stock options on a date when, in reality, no such corporate action took place."
Alexander, who is an Israeli citizen, fled the United States last year and has been living in Namibia where he lives in a golf club development with his wife and children. He has made various charity contributions in the African country. Attempts by U.S. law enforcement authorities to extradite Alexander to face charges in the United States have been unsuccessful to date.
In Sorin's court appearance Thursday, Judge Nicholas G. Garaufis sentenced the defendant to three years of supervised release to be served at the conclusion of his time in prison. In addition, Sorin was ordered to pay $51.8 million in restitution.
Sorin is scheduled to report to prison in August. In a statement to the court, Sorin said: "I have pleaded guilty to a federal crime. I have no excuse for my conduct. The very fact that I find myself before this court is extremely painful for me and my family."
Another former Comverse executive, David Kreinberg, has also pleaded guilty and is awaiting sentencing.
Some 140 companies and their executives are being probed by federal and state regulators examining stock options backdating activities.