Comverse Technology Inc. (Nasdaq:CMVT) is close to a compromise with investors concerning a class action suit over the options backdating affair. Sources inform "Globes" that the company, which provides billing software and systems and multimedia communications services, is expected to pay investors between $200-250 million to settle the suit against it in the US.
The belief is that former Comverse founder Kobi Alexander, who fled the US and settled in Namibia, will pay $60 million from his own pocket as part of the settlement.
The company itself will pay between $140-170 million to investors in a number of payments during 2010, while Alexander himself will make an immediate payment of $50 million out of the total amount he is agreeing to pay. As part of the compromise all parties agree that Comverse will not admit any culpability over the affair.
News broke of Comverse's backdating affair four years ago when it became clear that the company and its managers had caused its investors financial losses by backdating options, which resulted in substantive accounting irregularities.
The likely compromise between Comverse, Alexander and the investors as part of the class action suit filed by US law firm Pomerantz Haudek Grossman & Gross on behalf of Menorah Mivtachim Holdings Ltd. (TASE: MORA) follows an agreement with the US Securities and Exchange Commission (SEC) last June by which Comverse was not required to admit or deny the SEC charges in the affair, and was also not required to pay a fine.
Published by Globes [online], Israel business news - www.globes-online.com - on December 14, 2009
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