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The U.S. Securities & Exchange Commission on Tuesday settled a long-running stock option-backdating case against former Comverse Technology Inc. Chief Executive Officer Jacob “Kobi” Alexander for $53 million in disgorgement and penalties. Alexander, who fled to Namibia and has been fighting extradition since 2007, will be permanently barred from serving as an officer or director of a public company. But his legal troubles aren’t over — he still faces a 35-count criminal indictment brought by the Department of Justice on charges including conspiracy, securities fraud, mail fraud and money laundering. On Aug. 9, 2006, the SEC filed suit against Alexander and two other Comverse executives, including former General Counsel William Sorin, in U.S. District Court for the Eastern District of New York, alleging that the trio fraudulently backdated stock options. The complaint also alleged that Alexander created a slush fund of backdated options, granting options to fictitious employees. He later used the options to recruit and retain key personnel. As a result, according to the SEC, Comverse materially overstated its net income and earnings per share for more than a decade. The settlement, which is subject to approval by U.S. District Judge Nicholas Garaufis, calls for Alexander to pay $26 million in disgorgement, $21 million in interest and a $6 million civil penalty. “Mr. Alexander is pleased to have resolved the SEC and civil forfeiture actions and to put the matter behind him,” said his attorney, Jeremy Hugh Temkin of Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer in New York, who added that the settlement came “without any admission of fault on his part.” The deal marked the end of most of the civil suits against Alexander — he originally faced five other actions: a federal securities class action, a federal derivative action, a state derivative action, direct action by Comverse and civil forfeiture proceedings. In December 2009, investors in Comverse common stock settled the securities class action for $225 million, of which Alexander contributed $60 million. A group of hedge fund investors opted out and those proceedings remain pending. The SEC was represented by Suzanne Jeanne Romajas. Sorin settled his case in 2007 for $3 million. Sorin settled his SEC case in 2007 for $3 million. He was also sentenced to a year and a day in federal prison–the first corporate executive to serve time for backdating-related crimes. Jenna Greene can be contacted at [email protected].

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