The former CEO of networking software company Comverse Technology has agreed to forfeit $46 million to help cover shareholder lawsuits against the company he founded.
Jacob "Kobi" Alexander has been on the run since 2006, when the US brought criminal charges against him, in connection with a stock option backdating scandal at Comverse. He is now living in Namibia and the US government is trying to extradite him to face charges, the US Department of Justice said.
The government had been trying to seize the holdings of two of Alexander's investment accounts since he fled the country four years ago, but Alexander and his wife had been fighting the seizure. On Tuesday, the DoJ announced that it had reached a settlement, with the government agreeing to hand the $46 million over to Comverse, which will use the money to settle shareholder suits relating to the backdating scandal.
The practice of falsifying the date stock options were granted in order to make them more valuable to company executives was widespread in the technology industry over the past decade. Around the time that Alexander fled the country, dozens of technology companies, including Apple, Broadcom and VeriSign, were forced to restate their financial results to take account of the backdating costs.
The settlement on Alexander's US assets does not settle the criminal case against him, however. And Alexander still has money, despite forfeiting the $46 million. According to prosecutors, he wired more than $56 million overseas in July 2006 as he was preparing to flee the country.
Previously a respected businessman, Alexander founded Comverse in 1982, but he resigned in the wake of the backdating scandal in May 2006. Comverse did not return messages seeking comment.