Thursday, December 04, 2008

Manian Resigns From STEC, A Day After Broadcom Fires Him For Phony Credentials

Updated

This evening, STEC Inc. (NASDAQ: STEC) announced that Vahid Manian resigned as a director of the company, a day after he was fired from Broadcom (NASDAQ: BRCM) for falsifying his educational background in reports filed with the Securities and Exchange Commission. In an 8-K report filed with the Securities and Exchange Commission, STEC disclosed:

On December 4, 2008, STEC, Inc. (the “Company”) received notice from Vahid Manian of his resignation as a director of the Company to be effective as of the end of December 31, 2008. Mr. Manian is also a member of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. The Company has commenced a search for a replacement to fill the vacancy that will be created by Mr. Manian’s resignation.

On Wednesday, December 3, 2008, Fraud Discovery Institute co-founder Barry Minkow released details of a background investigation showing that Broadcom Corp. Senior Vice President and STEC Inc. Board Member Vahid Manian did not receive a “B.S.E.E and an M.B.A from the University of California, Irvine” as claimed in a Broadcom proxy filing and an STEC proxy filing with the SEC.

That evening, Broadcom fired Vahid Manian and issued a terse one-sentence statement:

On December 3, 2008, the employment of Vahid Manian, Senior Vice President, Global Manufacturing Operations of Broadcom Corporation and an officer and/or director of various Broadcom subsidiaries, was terminated. A search has commenced to find his successor.

Meanwhile, Microsemi Corporation (NASDAQ: MSCC) President and CEO James J. Peterson continues to categorically deny Minkow’s report that he has misrepresented his degrees from Brigham Young University in filings with the SEC. However, Brigham Young has re-verified that he did not receive a degree.

According to a Bloomberg News article by Ian King:

Microsemi Corp. Chief Executive Officer James Peterson didn’t receive any degree from Brigham Young University, according to the school’s registrar, repeating his position after Peterson said he expected to be vindicated.

“We have tried to look at everything that Mr. Peterson has said and tried to look for any possibility,” Jeffrey Bunker, registrar of the Provo, Utah, school, said today in a phone interview. “All of our records and information clearly verify and reverify what we stated earlier, that he did not receive a degree.”

James J. Peterson is a long-time friend of Vahid Manian, who was fired from Broadcom and resigned as a director of STEC after Minkow reported that Manian falsified is educational background. Peterson and Manian worked together at Silicon Systems in the mid-1990s and it was Peterson who hired and vetted Manian for that job. Both Peterson and Manian served together on the board of directors of STEC and were members of its audit, compensation, and nominating committees, before Manian resigned from STEC today.

Update:

Late this evening, Microsemi issued a press release supporting its embattled President and CEO, James J. Peterson. The press release hinted that even if Peterson falsified his educational background, as reported by Minkow and reasserted by Brigham Young University, Peterson is still assured his job at the company. See below:

Microsemi Corporation (NasdaqGS: MSCC - News) announced today that its Governance Committee of its Board of Directors is currently reviewing the status of the academic credentials of its President and Chief Executive Officer, James J. Peterson, and intends to work to resolve such status. Microsemi Board Chairman Dennis Leibel emphasized that Mr. Peterson has the full support of the Board and there are no plans to alter his role as President and Chief Executive Officer of Microsemi. "I want to assure our shareholders that Jim's educational credentials in no way reflect on the strength of Microsemi, which has been an industry leader. The Board's continuing support of Jim Peterson re-affirms our backing of his strategies, operational excellence and proven executive leadership,'' he said.

Note: Bold print and italics added by me.

Apparently, Board Chairman Dennis Leibel is hedging the company's position, just in case Peterson cannot substantiate his educational credentials by saying, "I want to assure our shareholders that Jim's educational credentials in no way reflect on the strength of Microsemi...."

In others words, he is implying that it is OK for the President and CEO of a public company to lie in SEC filings. The Microsemi board is advised to read SEC Regulations on compliance with a company's code of ethics.

To be continued....

Written by,

Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

Other relevant blog posts:

12/03/08: Barry Minkow Reports More Corporate Scoundrels Misrepresenting Credentials

12/03/08: Broadcom Executive Fired Today For Phony Credentials, While Microsemi Executive Remains Under Scrutiny

Disclosure:

I am not short or long any of the companies named in this blog post. However, the Fraud Discovery Institute and/or Barry Minkow may have a short position in the companies mentioned in this blog post. Please read the Full Disclaimer on FDI for Profit Status.

Over a year ago, I provided funds to Fraud Discovery Institute (FDI) to help pay costs of its investigations, though I had no control over any monies spent. I am not an owner, manager, employee, or consultant of Minkow or FDI and I have not received any compensation from them.

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