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CRIME
AND PUNISHMENT
May
16,
2007 |
Most corporate executives who engage in fraudulent
conduct aren't so concerned as long as they just have
to pay a penalty. After all, they probably have more
than enough money to pay the fine. With the
extraordinary high levels of executive compensation
in today's America, for many executives paying a
multimillion fine is just a slap on the wrist.
However, going to prison is a different. For some
time, many have minimized the backdated options
scandal. Some viewed it as a victimless crime or
no crime at all. .
That may now change after the former general counsel
of Comverse Technology, Inc. (CMVT.PK) was sentenced
to jail last week. This company should not be confused
in any way with the sneaker company.
Comverse Technology and its subsidiaries engage in the
design, development, manufacture, marketing, and
support of software, systems, and related services
for multimedia communication and information
processing applications.
William F. Sorinl was sentenced to one year and one
day in prison last week after pleading guilty in
November, 2006, to a conspiracy charge in a
stock-options backdating scheme. Earlier this year,
he settled with the SEC and paid over $3 million in
disgorgement.
By no means, however, was what happened at Comverse
an isolated incident. Well over one hundred companies
have been investigated for their alleged options
backdating. We are investigating three such
companies - Transaction Systems Architects, Inc.
(NASDAQ: TSAI), Sonic Solutions (NASDAQ: SNIC) and
Active Power Inc. (NASDAQ: ACPW) and if you are an
affected investor in any of these companies you may
wish to contact us. . In each of these cases,
when allegations against the company were disclosed,
its stock tumbled and hasn’t recovered.
Trouble for Sterling Financial Corporation (Nasdaq: SLFi) Investors
Sterling Financial Corporation is a financial services
company based in Lancaster, Pennsylvania.
On April 30, 2007, before the opening of trading,
Sterling Financial disclosed “that as a result of
information obtained from an internal investigation,
it expects to be restating financial statements for
the years 2004 through 2006 and is postponing its
2007 annual shareholder meeting.”
Upon this announcement, the price of Sterling Financial
shares declined from $20.72 per share at the close of
trading on April 27, 2007, to close at $16.65 per share,
a decline of $4.07 per share, or approximately 20%, on
heavier than usual trading volume.
It appears that investors who purchased Sterling
Financial between April 27, 2004 and April 27, 2007
may be affected.
Fremont General Corporation (NYSE: FMT) Suffers Stock
Collapse Fremont, based in Santa Monica, California,
is a financial services company that had engaged in
subprime mortgage lending.
The Company recently has been ordered by the Federal
Deposit Insurance Corp. (“FDIC”) to, among other things,
cease and desist: 1) “Operating without effective
risk management policies and procedures in place in
relation to the Company’s brokered subprime mortgage
lending and commercial real estate construction
lending businesses”; 2) “Operating with inadequate
underwriting criteria and excessive risk in relation
to the kind and quality of assets held” by the Company;
3) “Operating without an accurate, rigorous and properly documented methodology concerning its allowance for loan
and lease losses”; 4) “Operating in such a manner as to
produce low and unsustainable earnings”; and
5) “Marketing and extending adjustable-rate mortgage
("ARM") products to subprime borrowers in an unsafe
and unsound manner that greatly increases the risk
that borrowers will default on the loans or otherwise
cause losses” to the Company.
Fremont has now disclosed that “it intends to exit its
sub-prime residential real estate lending operations.”
Fremont has failed to file its Annual Report on Form
10-K for the fiscal year ended December 31, 2006 on time.
Not surprisingly, Fremont’s common stock has plummeted
as a result of these disclosures.
If you are an affected investor in Sterling Financial Corp,
Fremont General Corporation or any of the companies listed
below, you may wish to contact us at info@securitiessleuth.com
or 877.511.4717 to discuss your options.
Other cases under investigation
LCA-Vision Inc. (LCAV)
Allot Communications (NASDAQ: ALLT)
Choice Hotels International (NYSE: CHH)
Aquila, Inc. (NYSE: ILA)
Gaming Partners (NASDAQ: GPIC)
Now with respect to securities cases that have recently settled. If you are an affected investor - you purchased any of these stocks during the relevant class period, you may wish to contact the claims administrator to obtain additional information. Remember, if you don't submit your claim form, you won't receive your share of any settlement.
Catalina Marketing Corp. (POS)
Class Period: October 14, 1999 to August 25, 2003
Claim Deadline: May 21, 2007
Claims Administrator: Gilardi
Spear & Jackson, Inc. (SJCK)
Class Period: February 1, 2002 to April 1, 2003
Claims Deadline: June 26, 2007
Claims Administrator: Garden City
Information regarding other recent settled cases, including the cases listed below can be found at www.securitiessleuth.com.
Winstar Communications (WCII)
Ibis Technology Corp. (IBIS)
Astropower, Inc. (APWR)
Again, you should contact the claims administrator (rather than us). However, if you are an affected investor in any of the companies under investigation, you many wish to contact us so that you can consider your options.
Likewise, if you happen to be aware of corporate restatements or other financial fraud -- especially if you're a victim -- you're encouraged to contribute to the Sleuth by giving your own tip-offs at http://securitiessleuth.typepad.com or by e-mailing info@securitiessleuth.com.
You can also call Mark McNair at 877-511-4717. If you have a friend or colleague you think would benefit from The Sleuth, please pass along this issue and ask them to sign up at
http://www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
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©2007, ALL
RIGHTS RESERVED, SECURITIES
SLEUTH |
