The former chief executive officer of Gemstar-TV Guide Inc. was found liable for securities fraud stemming from his role in the company’s accounting scandal, according to the Associated Press, citing a ruling unsealed Monday in a regulatory lawsuit.
Former CEO Henry C. Yuen was accused of inflating the company’s revenue by $248 million to boost its stock price, the wire service reported, as well as misrepresenting facts to Gemstar’s auditors and falsifying its books.
As CFO magazine reported in April 2005, the Securities and Exchange Commission criticized the company for lack of cooperation with during the first eight months of the SEC’s investigation — a period during which Yuen and CFO Elsie Leung remained with the company (See “The Limits of Mercy”). Leung settled with the SEC last month, agreeing to disgorge $600,000 and pay $750,000 in civil penalties.
U.S. District Judge Mariana R. Pfaelzer filed her ruling against Yuen last Thursday under seal, according to the AP report.
“I don’t see eye to eye with her decision, but she’s a judge,” Yuen’s attorney, Stanley S. Arkin, told the AP, adding that he is considering an appeal. “The game isn’t over.”
In a statement, Gemstar officials reportedly said they were pleased by the decision to hold Yuen “accountable for his wrongful and inappropriate actions.”
“After nearly three years of litigation, the court categorically rejected Henry Yuen’s finger-pointing and attempts to blame others for the massive fraud at Gemstar,” SEC’s regional director Randall Lee told the wire service. The SEC will now propose a penalty for Yuen.
According to the AP report, Yuen is still being investigated by the Justice Department in a criminal case after a federal judge’s rejected an earlier plea deal.