French media group Vivendi Universal settled fraud charges with U.S. regulators on Tuesday and its former Chief Executive Jean-Marie Messier agreed to forfeit the severance package he had fought for.

The U.S. Securities and Exchange Commission  said Vivendi agreed to pay $50 million in civil penalties and Messier agreed to drop his bid for a 21 million euro ($26 million) severance package he negotiated prior to resigning, the SEC said.

Messier and former Chief Financial Officer Guillaume Hannezo, who also settled fraud charges, will pay a combined amount of more than $1 million in disgorgement and civil penalties.

Messier, who led an expansion spree that left Vivendi with large debts and close to collapse, was forced out as head of the company last year. Vivendi has since refused to pay a 21 million euros severance package Messier claims he should receive.

The SEC said the funds will go to investors who were harmed by the fraud, which spanned from December 2000 to July 2002 when the company issued false press releases, made improper adjustments to earnings, and failed to disclose future financial commitments.

Messier, in a statement, said he is pleased that the investigation is resolved and is looking forward to pursuing his new career at his business consulting firm, Messier Partners.

"The resolution of the SEC proceeding represents a personal sacrifice for me, but it is a considerable consolation that the funds will be used to benefit Vivendi shareholders," he said.

Vivendi, Messier and Hannezo neither admitted nor denied the SEC charges.

NO RESTATEMENTS REQUIRED

Vivendi said the SEC is not requiring the company to restate any of its past financial statements. The company's CEO, Jean-Rene Fourtou, said the company was pleased to close the SEC matter.

Hannezo's attorney, Martin Perschetz, declined to comment except to say, "As the documents filed in court today make clear, Mr. Hannezo has not admitted to the SEC's charges."

The SEC, which filed a civil complaint in a federal court in Manhattan, said Messier, 47, who lives in New York, was banned from holding an officer or director position of a public company for 10 years and Hannezo was barred for five years.

During much of the period during which the SEC said the fraud took place, the two executives worked in Vivendi's New York office.

"Our lawsuit today demonstrates that even the most complex schemes involving foreign issuers will be uncovered and pursued," David Nelson, director of the SEC's Miami office said.

Earlier this year the SEC sought to freeze the contested severance payment pending resolution of a private investigation against Vivendi and its directors, officers, controllers, agents or employees.

Under the Sarbanes-Oxley Act, passed by the U.S. Congress last year in response to corporate scandals, the SEC may require a public company to temporarily freeze extraordinary payments to officers or directors while a regulatory probe is underway.

Messier, in addition to loosing the severance money currently held in escrow, agreed to pay a civil penalty of $1 million, and Hannezo will pay disgorgement and a civil penalty totaling $268,149, the SEC said.

Close

Today's Top News		Top International News
+Mainland smashes Taiwan spy ring ( 2003-12-24) +Nation inks deals to purchase US aluminium ( 2003-12-24) +Country to further fight official corruption ( 2003-12-24) +Illegal online games rampant ( 2003-12-24) +Private sector doing well as the State relaxes grip ( 2003-12-24)		+Vivendi, Messier settle SEC charges ( 2003-12-24) +Haiti protests draw musicians, artists ( 2003-12-24) +Christmas cheer elusive in Bethlehem ( 2003-12-24) +Parmalat bankruptcy plan to push ahead ( 2003-12-24) +Blasts rock Baghdad as US troops fight guerrillas ( 2003-12-24)