David Kreinberg, Former Cfo of Comverse Technology Inc., Pleads Guilty to Securities Fraud Charges
Separately Resolves Related Case with the Securities and Exchange Commission
BROOKLYN, NEW YORK - Roslynn R. Mauskopf, United States Attorney for the Eastern District of New York, and Mark J. Mershon, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, announced today that DAVID KREINBERG, former Chief Financial Officer of Comverse Technology Inc., waived indictment and pleaded guilty to a two-count felony information charging one count of conspiracy to commit securities fraud, mail fraud, and wire fraud, and one count of securities fraud. The pleas were entered before United States District Judge Nicholas G. Garaufis at the United States Courthouse in Brooklyn, New York. The charges stem from the stock options backdating and slush fund schemes at Comverse from 1998 to 2006.
The conspiracy charge carries a maximum sentence of five years' imprisonment and a fine of up to $250,000, or twice the gain or loss from the offense. The securities fraud charge carries a maximum sentence of ten years' imprisonment and a fine of up to $1,000,000. The charges also require restitution in an amount to be determined by the Court at sentencing, currently estimated at $51 million.
Separately, the Securities and Exchange Commission settled its civil charges against KREINBERG under an agreement that provides for a permanent injunction enjoining him from violating or aiding and abetting violations of the antifraud, reporting, record-keeping, internal-controls, false-statements-to auditors, Sarbanes-Oxley certification, and ownership-reporting provisions of the federal securities laws; a permanent officer-and-director bar; the payment of $2,394,917.68 in disgorgement and prejudgment interest; and a permanent suspension from appearing or practicing before the Commission as an accountant.
The U.S. Attorney's Office commended the FBI for its partnership in the criminal case, and gratefully acknowledged the assistance of the Securities and Exchange Commission, which is pursuing separate civil proceedings.
The government's criminal case is being prosecuted by Assistant U.S. Attorneys Ilene Jaroslaw, Linda Lacewell, Sean Casey, and Kathleen Nandan.
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