Two former top executives at Trident
Microsystems Inc. have agreed to pay a combined $1.58
million to help settle charges that they ran a fraudulent stock option
backdating scheme, federal regulators said Friday.

Frank C. Lin, the Santa Clara-based semiconductor company’s founder
and former CEO, and Peter Jen, former chief accounting officer,
allegedly ran the scheme from at least 1993 to May 2006, said the
Securities and Exchange Commission.

Lin and Jen neither confirmed nor denied the charges as part of their
settlement, said the commission, which filed its 33-page complaint in
Washington, D.C., federal court.

According to the SEC, Lin backdated stock option documentation to
make it appear options had been granted on earlier dates when shares
closed at lower prices. Jen was allegedly aware of some of the
backdating practices from at least 1998 to 2006 and approved backdated
grants to certain employees.

The SEC also alleged that Lin and Jen signed or approved filing
annual and quarterly reports with the commission “that they knew, or
were reckless in not knowing,” excluded compensation expenses associated
with the backdating.

According to the SEC, the scheme concealed “millions of dollars” in
expenses from Trident shareholders.

As part of his settlement, Lin agreed to pay a $350,000 penalty and
to be barred for five years from serving as an officer or director of a
public company. He also agreed to disgorge $817,509.

Jen, meanwhile, agreed to pay a $50,000 penalty and to be barred for
five years from serving as an officer or director of a public company.
He agreed to disgorge $359,819.

Their settlements are subject to approval by U.S. District Court for
Washington, D.C.

Trident’s semiconductors are used in digital television sets,
personal computer TVs and set-top box products. According to its
website, the company has satellite offices in San Diego, Illinois, New
Jersey and Texas, as well as China, Hong Kong, Japan, South Korea,
Taiwan and India. It also has offices in France, Germany, the
Netherlands, the United Kingdom and Israel.