3 at Comverse Charged in Stock Options Case

Describing a brazen scheme to manipulate the granting of options, federal prosecutors in Brooklyn charged three former executives of Comverse Technology with mail, securities and wire fraud yesterday. The three executives, prosecutors said, used fictitious employees to create a secret slush fund of options to be distributed to favored employees.
“In what can only be called an abuse of corporate power, these executives, through fraud and deceit, rewarded themselves and their friends at the expense of the investing public,” said James W. Burrus Jr., the acting assistant director of the Federal Bureau of Investigation, at a news conference in Washington yesterday.
Mr. Burrus said that the F.B.I. was investigating 45 cases involving the backdating of options. More than 80 companies nationwide are now under investigation over their options practices by the S.E.C. or by federal prosecutors in San Francisco, Brooklyn and Manhattan.