According to the announcement, the agreement provides for the payment of over $3 million in civil penalties, disgorgement, and prejudgment interest; a permanent injunction; a permanent officer-and-director bar; and suspension from appearing or practicing before the Commission as an attorney.
The SEC charged Sorin and two other former Comverse executives on August 9, 2006, with, among other things, engaging over many years in a fraudulent scheme to grant undisclosed in-the-money options to themselves and others by backdating stock option grants to coincide with historically low closing prices of Comverse common stock (See Comverse Execs Face Fraud Charges for Options Backdating).In November, pleading guilty to charges brought by a US Attorney’s office in New York, Sorin admitted he conspired with former Comverse chief executive Jacob “Kobi” Alexander to backdate the options and falsify financial statements to hide the fraud from shareholders (See Comverse Former General Counsel Pleads Guilty ).
According to the SEC announcement, its complaint against Sorin also alleges he created false company records that facilitated a similar backdating scheme at Ulticom, Inc., another public company that is a majority-owned subsidiary of Comverse.
Sorin consented to the judgment without admitting or denying any wrongdoing. Specifically, he will pay $1,670,915.03 in disgorgement, of which $1,007,201.58 represents the “in-the-money” benefit from exercises of backdated option grants; $817,509.07 in prejudgment interest on the full disgorgement amount; and a $600,000 civil penalty, for a total of $3,088,424.10.