Thank you Paul and Linda for your leadership and fortitude in attacking the criminal greed that leads to blatant abuses of corporate power as we see here today.
Today’s complaints represent yet another in a sad, continuing parade of ruined lives and shattered corporations. Since the formation of the President’s Corporate Fraud Task Force in 2002, the FBI and its partners have convicted more than 400 people in a variety of corporate fraud schemes. Right now, there are 260 Agents working on over 420 corporate and securities fraud cases to protect the investing public. This includes 45 instances of backdated stock options—the newest trend in investor fleecing.
Backdated stock options is such an innocent sounding name, but it is the corporate equivalent of placing a bet after the race has been run. In what can only be called the brazen abuse of corporate power, these executives—through fraud and deceit—rewarded themselves and their friends at the expense of the investing public. Alexander used the scheme to steal $6 million from the corporation. Kreinberg and Sorin each netted $1 million. By fraudulently backdating these options and not reporting these awards, the defendants deceived the investing public. They created a slush fund that was used to secretly reward corporation insiders—in one instance netting an executive $2 million in instant profit. Comverse, a billion dollar publicly traded company, and its shareholders were plundered by these modern day pirates and today, they must be held accountable.
I want to congratulate the men and women of the FBI’s New York Field Office who have been working on this case, the prosecutors, and the dedicated employees of the SEC. Andy Arena and David Chaves of the NY’s FBI office are here with me and will provide you with more information on this investigation, should you desire.
This is a strong partnership that won’t quit.