The Securities and Exchange Commission on Monday sued three former top executives of Gemstar-TV Guide International Inc. as part of its investigation of accounting irregularities at the Los Angeles firm.
The suit, filed in U.S. District Court in Los Angeles, named Peter Boylan, Gemstar's former co-president; Jonathan Orlick, its former general counsel; and Craig Waggy, a former chief financial officer of TV Guide, the magazine owned by Gemstar. All three were charged with securities fraud violations for allegedly participating in a "widespread and complex scheme" to inflate revenue and mislead investors about the company's financial performance.
Lawyers for the executives denied the charges.
In addition, Boylan's attorney, Patricia Glaser, said she was frustrated by the SEC's decision to sue her client because he had been cooperating with the agency for the last 14 months. She also said the SEC had information that vindicates Boylan.
The SEC is seeking unspecified civil penalties and wants any ill-gotten gains to be returned to shareholders. It also wants each of three to be barred from serving as an officer or director of a public company.
None of them is currently employed by Gemstar, which produces electronic programming guides that help consumers navigate television listings. Boylan and Waggy are executives at Liberty Media Corp.
The SEC filed similar charges in June against Gemstar's founder and former chief executive, Henry Yuen, and its former chief financial officer, Elsie Leung. The two top executives were ousted in 2002 after Gemstar's accounting scandal came to light. The scandal wiped out billions of dollars in shareholder value and allowed Rupert Murdoch's News Corp. to wrest control of the company from Yuen.
In an amended complaint filed Monday, the SEC alleged that Yuen and Leung overstated revenue at Gemstar by at least $248 million from June 1999 to September 2002. That is slightly more than the SEC alleged in its original complaint.