U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20599 / May 23, 2008
U.S. v. Henry C. Yuen, No. CR 08-00567 (C.D. Cal.)
Former Chairman and CEO Of Gemstar-Tv Guide International, Inc. Charged With Obstruction of an SEC Investigation
The Securities and Exchange Commission announced that on May 13, 2008, Henry C. Yuen, the former chairman and chief executive officer of Gemstar-TV Guide International, Inc., was indicted on a felony charge of obstructing a Commission investigation.
The indictment alleges that during an investigation regarding accounting irregularities at Gemstar-TV Guide, the Commission issued a subpoena to Yuen requiring him to produce documents. After receiving the subpoena, Yuen allegedly began deleting from his computer various documents that were called for by the subpoena. In addition, the day before Yuen was scheduled to appear for testimony in the Commission investigation, Yuen allegedly ran a program on his computer that made it impossible to recover the documents he had previously deleted.
The SEC's complaint, filed in June 2003, alleged that from June 1999 through September 2002, Yuen participated in Gemstar's fraudulent overstatement of revenues by at least $248 million to meet its ambitious financial projections. After a three week trial in December 2005, the court found in favor of the Commission and against Yuen on all claims including securities fraud and ordered Yuen, among other things, to pay over $22 million in disgorgement and penalties. On April 1, 2008, the Ninth Circuit affirmed the district court's ruling finding that Yuen committed securities fraud, and found the court ordered disgorgement and penalty against Yuen was appropriate.