Boylan-SEC Deal Cost $600K

Author:
Publish date:

Former Gemstar-TV Guide International Inc. co-president Peter Boylan agreed to cough up $600,000 last week as part of a settlement he reached with the Securities and Exchange Commission, which had accused him of securities fraud.

Boylan, 40, a confidant of Liberty Media Corp. chairman John Malone, was a rising star in the cable industry. The former United Video Satellite Group president helped drive consolidation in the interactive program guide sector, leading the mergers between UVSG and TV Guide, and Gemstar’s later marriage with TV Guide. But while at Gemstar from 1999 through 2002, the SEC claimed Boylan helped Gemstar overstate revenue by at least $248 million, partly through booking interactive-program-guide ad revenue through disputed or non-existent agreements and through “round-trip” transactions.

NO ADMISSION

While Boylan consented to a fraud injunction as part of the SEC settlement, he did not admit or deny any of the allegations in the complaint. He also agreed to pay a cash disgorgement of $300,000, in addition to a $300,000 civil penalty.

Boylan isn’t prohibited from working as an officer at a public company, according to his attorney, Patricia Glaser. Indeed, she said the outspoken Boylan, known to play hardball with competing IPG firms and companies that he claimed infringed on Gemstar’s patents, from EchoStar Communications Corp. to Scientific-Atlanta Inc., hopes to work again in the cable industry.

LIBERTY 'OPTION’

“I think he’s considering a variety of options, one of which would be continuing with Liberty. But I don’t think he’s made up his mind,” Glaser said.

Boylan resigned as chairman of Liberty-controlled OpenTV Corp. and CEO of Malone’s defunct Liberty Broadband Interactive Television unit late last year, shortly before the SEC sued him. But he continues to work as a paid consultant for Liberty, Glaser said. Liberty officials couldn’t be reached for comment last week.

Glaser said Boylan cooperated with the SEC investigation. The commission still has charges pending against Gemstar founder Henry Yuen, former CFO Elsie Leung, former general counsel Jonathan Orlick and former CFO Craig Waggy.

Boylan declined to comment last week.

One of Boylan’s biggest challenges at Gemstar was driving ad revenue to the company’s interactive program guide unit, which distributes TV Guide Interactive to cable operators.

The SEC claimed Boylan and other Gemstar executives duped investors by booking ad revenue through dubious accounting, including pushing Motorola Corp. to agree to buy $17.5 million in pre-paid advertising as part of a patent dispute settlement Gemstar reached with the set-top vendor in October 2000, without disclosing the advertising deal to investors.

Gemstar also failed to tell investors that as part of a deal to sell its stake in WGN to Tribune in 2001, Tribune committed to buy $100 million in advertising from Gemstar over a six-year period, the SEC said.

Related