Fine Sought for Gemstar Ex-CEO

Henry Yuen, former chief executive of Gemstar-TV Guide International Inc., should pay $60.9 million for presiding over an accounting fraud at the company, the Securities and Exchange Commission said.

The agency’s proposed sanction in a court filing this week includes a $15.7-million civil penalty, which would be the largest SEC fine for an individual in an accounting case. Yuen was found liable for securities fraud this month in Los Angeles.

U.S. District Judge Mariana Pfaelzer ruled March 16 that Yuen misled investors and Gemstar’s auditors while inflating the company’s revenue from 1999 to 2002. Gemstar’s stock price has fallen about 80% since the $248-million fraud was revealed.

Yuen also faces criminal charges for his role in the fraud. He withdrew a plea agreement with the Justice Department in January after a judge said it was too lenient. Yuen had agreed to spend six months in home detention for destroying evidence in the SEC’s investigation.

Hollywood-based Gemstar fired Yuen in April 2003. The company, in which Rupert Murdoch’s News Corp. owns a controlling stake, paid $10 million in 2004 to settle with the SEC.

The SEC in its filing also asked that Yuen be barred from serving as an officer or director of a public company. The $60.9-million sanction includes the $15.7-million penalty and another $15.7 million in disgorgement of profits and requires Yuen to relinquish all rights to $29.5 million in severance pay that was frozen by the court.

Pfaelzer has scheduled a hearing on Yuen’s sanction April 5. Stanley Arkin, Yuen’s attorney, didn’t return a call for comment.