Big Brother is watching...VOIP trace leads to Alexander's capture
The options backdating scandal continues to unfold, and unfortunately for shareholders it looks like the practice was far more systemic than we had any reason to suspect. But like all things, there are varying degrees of violation that range from poor controls and oversight (i.e., unintentional but wrong nonetheless) to outright fraudulent. While our country guarantees the presumption of innocence, it's awfully difficult to not form some strong opinions about where the former executives at Comverse (CMVT) fall.
The Comverse story reads like a movie script, with offshore bank accounts, accused executives running from authorities and then modern technology leading to their capture halfway across the world. Earlier this month, the FBI apprehended David Kreinberg and William Sorin, formerly Comverse's CFO and General Counsel, respectively, on charges of fraudulent backdating and the creation of a "slush fund" using falsified documents to hide the ill-gotten proceeds. Notably absent from the list of apprehended executives was Comverse's long-time CEO Jacob "Kobi" Alexander.
Alexander had fled the country, and allegedly extricated almost $60 million in the process. Many presumed Alexander had fled to Israel (he's has dual citizenship) but on Friday he was captured in...Sri Lanka!!??? And he has modern technology to blame; according to published reports, authorities somehow found him when he used Skype to make a 1 minute phone call.
Not to discount the seriousness of this issue (or the broader message backdating implies about how company management often has misaligned interests with other stakeholders), does anyone else find it ironic that Alexander, who made his millions running a company that powers traditional and cellular phone services (primarily voice-mail) was caught due to VOIP?
Related Posts:
- Memo to Daniel Warmenhoven: The Valley Isn't the New Salem
- Et Tu, Apple?
- Options Backdating: Hats Off to Several Sellside Analysts
Note: At the time of this writing I, and/or funds I maintain discretionary control over, did not maintain a position (long or short) in CMVT.
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