The Associated Press reports that Sorin admitted to a federal judge in Brooklyn that he conspired with chief executive Jacob “Kobi” Alexander to backdate the options and falsify financial statements to hide the fraud from shareholders. “I knew that what he was doing was wrong and did not challenge his conduct. I deeply regret my conduct. Because of the respect I felt for Mr. Alexander, I did the wrong thing,” Sorin said, according to the newswire.
Sorin faces up to five years in prison at his sentencing scheduled for February 9.
Sorin, Alexander and former Chief Financial Officer David Kreinberg have been accused of not only fraudulently backdating options, but fraudulently circumventing accounting and disclosure rules by backdating the grant documents and then issuing false proxy statements and periodic public filings misrepresenting that Comverse’s stock options were granted at fair market value (See Comverse Execs Face Fraud Charges for Options Backdating ). In addition to the backdating scheme, Alexander and Kreinberg allegedly generated hundreds of thousands of backdated options they placed in a secret slush fund to be used at Alexander’s sole discretion to benefit favored employees.
Kreinberg pled guilty last week (See Ex-Comverse CFO Pleads Guilty in Options Backdating Case ). Meanwhile, Alexander, who had fled the country, has been arrested in Namibia and is fighting extradition.