The Securities & Exchange Commission on Thursday sued Gemstar-TV Guide’s former CEO, Henry Yuen, and chief financial officer, Elsie Leung, for inflating revenue at the company by at least $223 million from 2000 to 2002.
The SEC’s civil suit seeks antifraud injunctions, civil penalties and the return of cash from stock sales, salaries and bonuses. It also would bar the pair from serving as officers or directors of a public company.
Yuen and Leung were fired for cause in March by Gemstar’s current management. Gemstar said in a statement that it continues to cooperate fully with the SEC investigation. Company added that it has completed a management and corporate governance restructuring (and) believes that it has resolved its past accounting issues.
Severance fees payable to Yuen and Leung under agreements reached in 2002 continue to be held by the company in a special account, Gemstar said.
Conflict with commission
Earlier this year, Yuen and Leung sued the SEC for pressuring Gemstar into withholding their pay packages. They had previously flouted the agency by failing to appear to testify about Gemstar’s accounts at scheduled hearings.
Separately on Thursday, satcaster EchoStar said a U.S. district court in Atlanta granted its motion for summary judgment against Gemstar, ruling that the embattled maker of electronic programming guides has no case in a patent suit.
EchoStar sued Gemstar in 2000 for violating federal and state antitrust laws and Gemstar countersued, accusing EchoStar of infringing two patents. EchoStar successfully argued that Gemstar didn’t fully own the patents, which involve program guide technology.
Previously, the court denied Gemstar’s motion to dismiss EchoStar’s antitrust allegations. The case is expected to go to trial next year.
In two separate court cases last year, the Intl. Trade Commission and the U.S. District Court for the Western District of North Carolina ruled that EchoStar did not infringe six different patents asserted by Gemstar.
In a statement, Gemstar said it’s “disappointed in the court’s ruling and believes that it and its subsidiaries have all the necessary rights required to pursue enforcement of (the patent) against EchoStar and others. The company intends to take appropriate steps to reinstate its claims.”
Gemstar shares fell 5.83% to close at $5.17 on Thursday.