The former chief financial officer of Gemstar-TV Guide International Inc. agreed to pay nearly $1.4 million to settle Securities and Exchange Commission charges that she participated in a scheme to defraud investors by inflating Gemstar's licensing and advertising revenues.
Elsie M. Leung, who also served as co-president, chief operating officer and a member of L.A.-based Gemstar's board, will be permanently barred from serving as an officer or director of a public company, the SEC said on Tuesday. She also consented to an order banning her from practicing before the SEC as an accountant.
The total of $1, 364,866 that Leung will pay is comprised of a disgorgement of $600,000, representing her "ill-gotten bonus," pre-judgment interest of $14,866 and a civil penalty of $750,000.
Leung agreed to the settlement without admitting or denying the charges.
In 2003, the SEC accused Gemstar of reporting false advertising sales to inflate revenue by about $248 million from 1999 to 2002. Gemstar shares plummeted in September 2002 as losses mounted.
The SEC had previously frozen $8.1 million of Leung's severance payments, as well as $29.5 million in severance of her co-worker, Henry Yuen, Gemstar's former chief executive.
In November, Gemstar, which publishes TV Guide, argued that Yuen deserved a harsher sentence than the six months of home detention outlined in an October plea agreement with federal prosecutors. As part of that plea deal, Yuen admitted that he destroyed documents during a separate investigation by the SEC. The company also took the unusual step of asking another U.S. Attorney's Office, in the Middle District of Florida, to launch a separate investigation of the allegations against Yuen.
Share of Gemstar fell 1.3 percent to settle at $3.17 on Tuesday.
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