Legal News

Kobi Alexander: Still on the Lam, but Now $60 Million Poorer

By Ashby Jones

Last time the Law Blog checked in on Long Island-based information technologies giant Comverse, it was to get up to speed on Kobi Alexander, the company’s former CEO, who fled to Namibia with his family in 2006 shortly after being indicted on stock-options backdating charges.

As far as we know, Alexander’s still in the African nation, milking the fact that Namibia has no extradition treaty with the U.S. But here state-side, he and his former company are paying the piper. Comverse on Friday agreed to pay $225 million to settle a securities class-action related to alleged backdated stock options, of which Alexander will pony up $60 million. The 56-page agreement, filed in Brooklyn federal court, still must be approved by Judge Nicholas Garaufis. Click here for the story, from the American Lawyer’s Ben Hallman.

The deal marks the second biggest backdating settlement, after UnitedHealth Group paid more than $920 million in 2008.

Hallman cites statistics by the Kevin LaCroix at the D&O Diary noting that the deal will be the 22nd options backdating class action to settle, out of 39 filed. Nine cases have been dismissed, and nine are yet to be resolved. The aggregate amount of all the backdating settlements, including Comverse, is now up to $1.785 billion, according to D&O Diary.

Comverse was represented by Joseph Allerhand and David Zeltner of Weil, Gotshal & Manges. Robert Morvillo of Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer represented Alexander. Patrick Dahlstrom of Pomerantz Haudek Grossman & Gross represented the lead plaintiff, the Menorah Group, an Israel-based insurance company and pension fund. Dahlstrom told Hallman that the agreement took a year to complete from the time it was first brought before a mediator.

Full post as published by Law Blog - WSJ.com on December 21, 2009 (boomark / email).