A federal judge has approved a $225-million settlement in a class action lawsuit against Comverse Technologies involving claims of options backdating and other misconduct by former top executives.
The case centers on accusations that former chief executive Jacob “Kobi” Alexander and other executives changed the grant dates of their stock options, setting the dates at low points in the stock price and thus increasing their own payouts.
U.S. District Court Judge Nicholas Garaufis, of the Eastern District in Brooklyn, issued the order Wednesday. Woodbury-based Comverse, which makes voicemail software, disclosed the settlement in a Securities and Exchange Commission filing last week.
The suit was filed by the Manhattan law firm Pomerantz Haudek Grossman & Gross LLP. Lead plaintiff was an Israeli insurance company, Menora Group, which claimed that options backdating and accounting practices harmed stockholders by inflating Comverse share prices.
Alexander was indicted but fled to Namibia and has fought extradition. He is shown above in court in Namibia in 2007. Criminal charges against Alexander, in his capacity as chief executive, stem from the same practices alleged in the civil suit.
The Namibian, a Windhoek, Namibia, newspaper, reported in December that Alexander “scored an important win in the Supreme Court on Friday by getting a potentially far-reaching section of the Extradition Act to be declared unconstitutional.” As a result, he does not have to wait in prison for the outcome of his extradition case, which could take years. Instead he will remain free during the legal process. Alexander’s wife and their three children are still living with him in Namibia, the newspaper reported.
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