The Securities and Exchange Commission wants Henry C. Yuen to pay nearly $61 million in penalties for his role in leading the accounting fraud at Gemstar-TV Guide International Inc., according to a court filing Monday.
The commission’s sanction includes $15.7 million in civil penalties and an equal amount in disgorgement of ill-gotten gains. Also, the SEC is seeking to deny the former chief executive of Gemstar-TV Guide his $29.5 million severance package, which is currently frozen during the litigation process, said Mike Piazza, the SEC lawyer who argued the case. The sentencing is scheduled for a hearing April 5.
Yuen was found liable for securities fraud in a federal ruling recently unsealed in Federal District Court in Los Angeles. It was up to the SEC to propose a penalty, which was disclosed Monday in the court filing.
Yuen and the company’s former CFO Elsie Leung were accused by the SEC of scheming to inflate the company’s revenues by $248 million in order to boost its stock price. The case started in 2003 as a civil action and escalated to criminal charges.
Leung agreed last month to pay a $1.4 million settlement to the SEC without admitting guilt or innocence. She was also barred from serving as an officer or director of a public company and was banned from practicing accounting for the SEC.
Yuen pleaded guilty last October to destroying company documents and received six months of home detention, agreed to pay $1 million in charitable donations and a $250,000 fine.
Gemstar executives protested the agreement, calling it too lenient, and have been seeking more severe penalties. The federal judge overseeing the case rejected the plea agreement in January, forcing Yuen to withdraw his guilty plea. That case is still pending.
According to Piazza, Yuen earned more than $100 million in compensation and from stock sales while lying to investors to inflate the company’s stock price. The SEC is also seeking disgorgement of ill-gotten gains
Gemstar, which licenses its TV programming guide technology to television companies and set-top box companies, publishes TV Guide magazine.
