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Former Gemstar Execs Serve as Basis for Supreme Court Ruling

Oct 11, 2005  •  Post A Comment

A legal tussle involving a pair of former executives from Gemstar-TV Guide International served as the foundation of a U.S. Supreme Court ruling Tuesday that strengthens the ability by the Securities and Exchange Commission to freeze the assets of corporate executives being investigated for accounting fraud.

The high court let stand an federal appeals court ruling that froze $37 million in termination payments to former Gemstar CEO Henry Yuen and former chief financial officer Elsie Leung, who are seen as being at the center of an accounting fraud scandal that has rocked the News Corp.-controlled company.

The two former executives argued that the freezing of the termination payments did not meet the extraordinary payments clause of the Sarbanes-Oxley Act of 2002, which sets forth several corporate governance guidelines.

The pair are expected to go to trial on civil charges in December for their alleged misdeeds, after they failed to reach a settlement with the SEC.

Gemstar paid a $10 million fine to settle SEC charges related to the case.