FBI: Comverse execs gain $8M from backdating

The criminal investigation federal prosecutors launched back in May into Comverse executives' issuance of stock options has reportedly uncovered a slush fund nicknamed "I.M. Fanton", fake employees and manipulated stock option grants. The decade-long scheme allegedly spearheaded by Comverse co-founder Kobi Alexander, CFO David Kreinberg and general counsel William Sorin began to unravel in March after a Wall Street Journal reporter called the company after noticing that the stocks were issued just before low dips in the stock price.

The three execs resigned in early May after allegedly raking in a personal gain of about $8 million from the backdating scheme, according to the FBI affidavit. The affidavit also alleges that Alexander cherry-picked days in Comverse's past stock trading where the price was low and assigned the stock options issuance dates to those times. Sorin then allegedly misled the board members to get them to sign the paperwork.

For more on Comverse's backdating charges:
- see this WSJ article (sub. req.)