Comverse CEO faces securities fraud charge a decade later
The former founder and chief executive officer of Comverse Technology Inc. pleaded guilty to one count of securities fraud in a Brooklyn federal court on August 24. Jacob Alexander ended his extradition fight in Namibia where he had been living in exile for the past decade. The government said he fled the United States in an obvious effort “to avoid criminal prosecution.”
A criminal complaint stated he manipulated Comverse options and sold stocks worth around $150 million between 1991 and 2005. Alexander admitted in court that he and other executives defrauded investors out of millions of dollars by using “backdating” to choose dates for granting options for employees. He made a profit of $138 million.
Alexander fled to Africa with his family in 2006 while he was under investigation for backdating stock options. Prosecutors were preparing to bring a fraud case against him for the scheme that allowed the purchasing of stocks at huge discounts. Alexander was indicted on 35 counts including fraud, conspiracy, witness tampering and obstruction of justice.
However, after returning to the United States 10 years later Alexander pleaded guilty to just a single count “relating solely to backdating.” The indicted executive’s lawyers asked for his release on a $25 million bond, arguing he was not a flight risk. U.S. District Judge Nicholas Garaufis denied bail, claiming that Alexander was untrustworthy.
The former CEO will be kept in a maximum-security prison until his December 16 sentencing. He could face up to 10 years in prison. Alexander’s attorney claimed he returned from Namibia “so he would have this nightmare behind him.”