We are confident that these claims will be disposed of in short order by the Court.” In the original suit against Comverse executives, lead plaintiff and Comverse investor the Menorah Group charged that Alexander, Sorin, and other officials, including former chief financial officer David Kreinberg, had falsified financial statements to inflate the company’s stock price and to mislead investors about the true condition of the company.

“Central to the alleged fraud was a stock option backdating scheme, in which Comverse granted undisclosed ‘in-the-money’ stock options to its employees by backdating its stock option grants,” noted court documents.

In 2006, he was charged with multiple counts of fraud and related offenses pertaining to irregularities in trading of Comverse stock; he subsequently fled to Namibia, a nation which has no extradition treaty with the US. He was subsequently sentenced to 30 months in prison.

Subsequently, Alexander arranged for his return to the U. Alexander founded Comverse Technology (NASDAQ: CMVT) in 1982 and built it up from a 3-person Israeli startup to employing over 5,000, becoming the leading provider of software and systems for telecommunication companies worldwide.

This derivative lawsuit settlement is separate from, but related to, the previously announced 5 million settlement of the Comverse Technology options backdating-related securities class action lawsuit (about which refer here).

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Garaufis didn’t mince words in response to arguments from Jacob “Kobi” Alexander’s attorney, Benjamin Brafman, who argued for a million bail package backed by Alexander’s family and million in cash, and insisted it...

It is unclear whether Deloitte, as Comverse’s auditor, will be held liable for any damages related to the suit.

However, the idea of suing or calling into question the work of a third party — such as an independent auditor — that is not directly connected to the alleged fraud may be gaining steam.