Gemstar Ex-Exec’s Lawsuit Tossed

Gemstar-TV Guide International Inc.’s former Chief Executive Henry Yuen won’t be able to sue the U.S. Securities and Exchange Commission for freezing his $29.5-million severance payment, a federal judge ruled Tuesday.

U.S. District Judge Mariana Pfaelzer in Los Angeles said the agency acted within its legal boundaries when it froze the combined $37.6-million severance of Yuen and former Chief Financial Officer Elsie Leung last year. Last month, the SEC charged both former officers with civil fraud, alleging that they inflated company revenue by $223 million over two years.

The SEC’s bid to freeze severance is part of a stepped-up government effort to deny executives money from corporate wrongdoing. Yuen and Leung, both of whom left the TV Guide magazine publisher in October, claim the SEC employed “intimidation and implied threat of sanction” to compel Gemstar to put the money into escrow last year.

“Plaintiffs’ current predicament is not, as they would have it, the result of a Hobson’s choice presented by the SEC,” Pfaelzer wrote.

Stanley Arkin, a lawyer for Yuen and Leung, didn’t return a call for comment.

Rupert Murdoch’s News Corp., a 42% owner of Gemstar, assumed management control of the company in October after Yuen and Leung stepped down. Gemstar has said it is cooperating with the continuing SEC investigation.

Shares of Los Angeles-based Gemstar, which traded above $101 in March 2000, rose 8 cents to $5.35 on Nasdaq.