Director Ties Linked to Options Scandal
The notion of backdating "may have been spread by word of mouth, through the conduit of directors sitting on the boards of more than one company," The Corporate Library concludes.
Stephen Taub and Sarah Johnson, CFO.com
October 19, 2006
A company mired in the options backdating scandal is likely to have something in common with other companies caught in the scandal: a director who sits on the board of at least one other implicated company.
That’s the finding of a new study by The Corporate Library, which concludes that “the practice of backdating stock options may have been spread by word of mouth, through the conduit of directors sitting on the boards of more than one company.”
Since its first study on the subject in June 2006, the number of companies implicated grew from 51 to 120 as of the end of September, the governance consultancy reported. (The Washington Post reported this week that that number had swelled to 135.) Through the end of last month, the number of companies being probed that have director-based links has grown even faster, from 11 to 51, according to the report.
Twenty-seven of the 120 companies, in fact, have more than one dual-board director. Just three such companies popped up in the Corporate Library’s earlier study. The director group comprises a total of 49 board members, with 43 sitting on the boards of two implicated companies and six sitting on three of them. In all, the 120 companies have 1,440 directors.
The Securities and Exchange Commission is apparently on the case. In fact, the SEC is investigating whether directors who sit on more than one company board may have spread the practice of backdating stock-option grants, Bloomberg reported.
“We are looking at the interrelationship between directors on boards of companies that may have problems,'' Timothy England, an SEC assistant director of enforcement, told the wire service in an interview.
While SEC spokesperson John Nester told CFO.com that the quote was accurate, he downplayed its importance. "This is not unique to backdating,” he said, noting that the commission routinely looks at the interrelationships among boards during its investigations. "We would look to see where else a board member has served,” he added.
The study also found that three companies have six directors who sit on more than one implicated company board—Comverse, Verint Systems, and Ulticom. Comverse is the controlling stockholder of Verint, the Corporate Library notes.
Verisign has five dual-board directors, while Juniper Networks and Xilinx have four. According to the study, two directors in the network of option-scandal boards—William H. Kurtz and Scott G. Kriens—connect the most boards.
According to the Corporate Library, Juniper Networks directors Kriens and Stratton Sclavos are responsible for the central position of the company within the network of linked companies, and between them sit on four other implicated boards. (Kriens is chief executive officer of Juniper Networks). But a spokesperson for the company dismissed the relevance of the directors' interlocking roles to the backdating scandal. "It's irrelevant as it relates to this matter," Juniper Networks’ Brendan Hayes told CFO.com. "Neither executive sits on the compensation committee or audit committee of these boards."
To the suggestion that the report had to do with word-of-mouth communications and the sharing of ideas, not so much which committee the directors sat on, Hayes said: "Beyond that, we have no comment." Through a spokesperson for Novellus Systems, where Kurtz is a director, Kurtz said he had no comment.
...and here's another little nugget from Yahoo! finance
"Verint Systems Inc. ("Verint") is presently unable to file the financial information required by Form 8-K in connection with its January 9, 2006 acquisition of MultiVision Intelligence Surveillance Limited's networked video security business (the "MultiVision Financial Information") as a consequence of the review by Comverse Technology, Inc. ("Comverse"), the 57% stockholder of Verint, of matters relating to grants of Comverse stock options and the potential impact of such review on Verint's financial statements. "
"The usefulness of CCTV cameras depends on how they are deployed, said Robert Wint, a spokesman for Verint Systems UK Ltd., which provides some of the equipment for the Underground's CCTV system."
So how come Verint's CCTV cameras on the Underground could not show any pics of the July 7th 'bombers' that morning?
Israeli firm's security failures: 911 and 7/7
Flashback: Israeli Security 'Protects' London's Underground
Israeli Security to Protect London's Underground
An Israeli security firm has been chosen to provide security for London’s Underground train network.
Verint Systems, a subsidiary of Israel's Comverse Technology announced that Metronet Rail has selected Verint's networked video solution to enhance security of the London Underground, according to an Israel21c report.
After extensive testing of Verint’s networked video system, including pilot installation on selected rail lines, Metronet Rail selected it to be installed on the entire Underground. The system will enable security personnel to monitor passenger platforms and certain remote portions of the track.
Verint president and CEO Dan Bodner told Israel21c: "We have significant experience working with transportation authorities and are committed to delivering innovative networked video security solutions for the transportation industry."
Metronet Rail, under a 30 year contract with the UK government, is responsible for maintaining parts of the London Underground's infrastructure. This includes ensuring security in trains, stations, tunnels and bridges.
The London Underground handles more than 3 million passengers each day, making it one of the busiest transportation systems worldwide.
Former boss of London tube security co. arrested in Africa
Former CEO of Comverse Technology arrested in Africa
Updated 9/27/2006 10:03 PM ET
From wire reports
The fugitive former chief executive of leading voice-mail-software maker Comverse Technology (CMVT) has been captured in Africa after a two-month international manhunt, U.S. officials announced Wednesday.
Details of the arrest of Jacob "Kobi" Alexander in the Republic of Namibia were not immediately available. But in a statement, U.S. Attorney Roslynn Mauskopf credited local officials in the southwest African nation for assisting the FBI in the capture.
Mauskopf said she would seek Alexander's swift extradition to face charges in federal court in Brooklyn. A call to his defense attorney in New York was not immediately returned.
The manhunt began in late July shortly before authorities unsealed a criminal complaint accusing Alexander and two other former top executives of secretly manipulating stock options for personal profit.
Before he disappeared, Alexander, 54, an Israeli citizen and a permanent U.S. resident, allegedly transferred $57 million to Israel, fueling speculation he may have fled there.
Two other defendants, former finance chief David Kreinberg and former senior general counsel William Sorin, surrendered in August and were released on $1 million bond each.
The complaint unsealed in federal court accuses the three men of making stock options more lucrative by backdating their exercise price to a low point in the stock's value. Usually, a stock option's exercise price coincides with the market value at the time of a grant, to give the recipient an incentive to drive the price higher.
From 1991 through 2005, Alexander exercised options and sold stocks worth about $150 million, making $138 million in profit, according to the complaint. Of that, about $6.4 million was generated by backdating options, it said.
Prosecutors allege Kreinberg and Sorin earned about $1 million each on backdated options.
In addition, the company awarded thousands of stock options to fictional employees, then secretly transferred the awards to an internal account under the name I.M. Fanton, which stood for phantom, court papers said. The scheme allowed Alexander to award those options to real "favored employees" and to himself without the Comverse board's approval, the papers added.
As CEO of Comverse, Alexander was sought out by former Chinese president Jiang Zemin, who slipped away from official meetings in 2000 to meet with him in Tel Aviv.
The scrutiny of backdating at Comverse has triggered the widest-ranging fraud charges to date from the more than 130 inquiries launched by regulators, prosecutors or companies into stock-options timing. Options backdating, used to reward employees with shares granted at below-market prices, has so far cost investors at least $7.9 billion in market value, according to Bloomberg data.
Comverse's fortunes soared during the late 1990s with growing sales of cellular phones that use the company's voice-mail software. The stock rose from a low of $9.98 on Oct. 8, 1998, to $121.63 on Jan. 24, 2001.
Comverse's shares rose 16 cents to $21.67 in Nasdaq composite trading Wednesday.
Comverse has yet to file complete financial reports for the year ended Jan. 31 and the first quarter ended April 30, having asked for more time to review the alleged manipulation of stock options by the three executives.
Contributing: The Associated Press, Bloomberg News
: 7/7: Israeli Security firms 'guarding' the Tube
ISRAELI FIRMS: Fortress GB Related to ICTS UK
Posted By: Christopher Bollyn
Date: Tuesday, 16 August 2005, 11:33 a.m.
Fortress GB - security tech firm and London 7/7 bombs
Fortress GB is an Israeli-run company doing business in Great Britain. It is on the same floor, in the same building, as ICTS UK, which is another Israeli transportation security firm. ICTS UK Ltd.and Fortress GB Ltd. are both located on the 1st floor of Tavistock House South, which is exactly where the bus blew up on July 7. An Israeli man answered the phone at Fortress GB and was noticeably reluctant to answer any questions about who ran the company although he did admit that a lot of Israelis worked there. The secretary at ICTS UK Ltd., however, quickly told me that the companies are related.
These Israeli security firms need to be investigated in light of the London bombings, because they provide "security technology" for the tube lines that were bombed. They have perfected their "security" skills in Israel and Iraq and then apply them in Britain and the U.S.A. This is a pattern. The same thing happened at Heathrow when the PanAm flight went down, the same thing occurred at Boston and Newark airports on 9/11.
Isn't it time for nations to use their own brains and people to protect their citizens and stop outsourcing their most fundamental obligations to dodgy Israeli "security" firms?
Who guards the guards?
(Chris Bollyn is a writer/photographer for American Free Press [www.americanfreepress.net] in Washington DC, and 'one of the most tenacious of false-flag terror researchers' (T.G.) - and was recently assaulted by the FBI.)
This has been deleted, but here is summary from http://www.huffingtonpost.com/2006/01/05/dem-leader-harry-reid-cal_n_1 3301.html
ICTS UK Ltd is another Israeli-run 'transportation security' company with offices in London. Although the company's registered address is listed as 8 Baker Street, they operate, however, from an office on the first Floor of Tavistock House South. Curiously, this is the exact same location that Fortress GB operate from. More curious still, Tavistock House is the exact location where the number 30 bus exploded on 7th July.
Given that both companies provide 'transportation security' services, operate from the same floor of the same office complex, and given that both are owned and run by Israelis, only a hardened 'coincidence theorist' would deny that there is evidence indicating tangible links between the two. Indeed, one could be forgiven for believing that the same people are behind Fortress GB Ltd and ICTS UK Ltd.
As Christopher Bollyn points out, these companies merit being investigated because "they provide 'security technology' for the tube lines that were bombed." Bollyn also points out that these Israeli companies perfect their 'security' skills in Israel and Iraq and then apply them in Britain and the USA.
ICTS International were the company who ran the security arrangements at ALL the airports from where the hijacked airliners departed from on the morning of September 11th, 2001.
'... Fortress GB, a smart card technology developer and integrator for ICTS Europe. ICTS Europe is an Israeli security company based in the Netherlands, a subsidiary of which is Huntleigh. Huntleigh was the security contractor at Logan Airport on 9/11 that failed to provide us with CCTV evidence of hijackers. The London Underground is one of Fortress GB's clients and according to their press release they provide smart card technology (personal details and biometric information) for contractors that operate in Tube stations.'
Fortress GB Ltd,
1st floor, South block D, Tavistock House, Tavistock Square, London WC1H9LG.
Concerning how quickly the search turned to Luton on July 7th:
'Luton is interesting because an office of ICTS (the Israeli security firm) is about a mile from a Thameslink station. ICTS is actually located in the Luton and Dunstable NHS Hospital. It seems a little odd that this firm that handles security for the Stansted airport would be located at the Hospital.
ICTS UK Ltd, Security control Room, Lewsey Road LU4 ODZ'