Friday, September 23, 2005

Former Gemstar-TV Guide CEO Pleads Guilty to Obstructing SEC Investigation

The U.S. Attorney's Office for the Central District of California announced that Henry Yuen, the former CEO of Gemstar-TV Guide International Inc., agreed to plead guilty to obstructing an SEC investigation into accounting fraud at the company by destroying e-mails and other electronic files.  According to a press release (here):

According to the Information being filed today, and as admitted by Yuen in a plea agreement with the government, also being filed today, the SEC began a formal investigation of Gemstar, a publicly traded company, in October 2002. Yuen received a subpoena from the SEC requiring him to provide the SEC with a broad range of items including e-mails, correspondence and all documents concerning Gemstar, including documents stored on his computer. After receiving this subpoena, Yuen deleted from his computer e-mails and Gemstar corporate documents that the subpoena required him to produce. Yuen also received a subpoena to testify before SEC investigators. In March 2003, the day before Yuen was scheduled to appear and testify before the SEC, Yuen installed a computer program called "Eraser 2003" on his Gemstar office computer. By running this program, Yuen - a computer expert - made it nearly impossible for anyone to recover the documents he had previously deleted. Shortly thereafter, Yuen had the hard drive from his office computer removed and taken away from his Gemstar office.

Yuen is also a defendant (along with the company's former CFO) in an SEC securities fraud suit (complaint here), and the obstruction plea will not help his defense in that case. (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/09/former_gemstart.html

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