Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Alvarion Won't Be Undone

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Two words I never want to hear in connection with the stocks I own:

  1. Fraud
  2. Fraud

OK, go ahead and add "slower growth" in there, too. Thankfully, Motley Fool Rule Breakers recommendation Alvarion (Nasdaq: ALVR  ) isn't seeing any of that. But management has been (gulp) accused of that other word.

Last week, former finance manager Ory Pinco filed a lawsuit in Israeli labor court asking for 500,000 shekels (the equivalent of $138,000) in damages, news agency HAARETZ reports. Pinco claims that she was fired after three months on the job for no reason, part of a revolving-door policy "meant to cover up senior executives' poor performance and lack of responsibility for financial matters, which include managerial corruption and fraud," according to her lawsuit.

Those are serious accusations, made more dangerous when you think of how risky Alvarion's core business is. Peer Clearwire (Nasdaq: CLWR  ) is bleeding money, for example. And while media and computing giants such as Comcast (Nasdaq: CMCSA  ) , Time Warner Cable   (NYSE: TWC  ) , Intel (Nasdaq: INTC  ) , and Google (Nasdaq: GOOG  ) all have a vested interest in WiMAX's success, AT&T (NYSE: T  ) and peers are hard at work developing an alternative known as LTE.

All that said, I see no evidence of financial shenanigans in Alvarion's filings. My most worrisome finds:

  • CEO Tzvika Friedman gave up his seat on Alvarion's board as of Aug. 15 because of "the challenges of dealing with the disparity between the requirements of Israeli law and the voting practices in the United States, where most of the company’s shares are held," whatever that means.
  • Alvarion fronts automotive lease payments for its executives; $2.8 million worth last year, up from $2.3 million in 2006 and $2.2 million the year before that. I'm not thrilled to see auto lease expenses equal 1% of revenue.

And yet even this feels like nitpicking. Alvarion is still producing outsized revenue growth, and a planned $30 million share buyback should add value to existing shareholders.

Fraud, Ms. Pinco? Let's see the evidence. Till then, I'm not selling.

Get your clicks with related Foolishness:

Fool contributor Tim Beyers owned shares of Alvarion and Google -- and Google's 2010 LEAPs -- at the time of publication. Read more of Tim's Foolish writings. He also hunts for the best of tech as a contributor to Motley Fool Rule Breakers, which counts Alvarion and Google among its holdings. Intel is an Inside Value pick. The Motley Fool's disclosure policy has never been accused of fraud.

Read/Post Comments (3) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 04, 2008, at 1:03 PM, spiegelm22 wrote:

    The auto leases should not trouble you so much. It is a common practice in Israel because of a loophole in the tax code. The lease cost is entirely deductible by the company but is not considered income to the individual.

    The loophole coupled with a 75% tax on new car sales has made this perk as standard as medical insurance is in the US.

  • Report this Comment On September 04, 2008, at 1:36 PM, TMFMileHigh wrote:

    Thank you, NJInvestor066. That's an important clarification.

  • Report this Comment On September 05, 2008, at 3:44 PM, darioma wrote:

    The leasing was impacted by a raise on taxes and a 20% devaluation of the dollar vs. the shekel (headquarters are in Israel and so most of the top executives).

    This is not a problem, but Pinco's allegations are kind of worrisome. I'm still in, but with my fingers ready to go.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 720582, ~/Articles/ArticleHandler.aspx, 10/25/2016 6:39:58 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 9 hours ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
ALVR $0.00 Down +0.00 +0.00%
Alvarion CAPS Rating: No stars
CLWR.DL $0.00 Down +0.00 +0.00%
Clearwire Corp CAPS Rating: **
CMCSA $64.96 Up +0.90 +1.40%
Comcast CAPS Rating: ***
GOOGL $835.74 Up +11.68 +1.42%
Alphabet (A shares… CAPS Rating: *****
INTC $35.26 Up +0.11 +0.31%
Intel CAPS Rating: ****
T $36.86 Down -0.63 -1.68%
AT and T CAPS Rating: ****
TWC.DL $0.00 Down +0.00 +0.00%
Time Warner Cable CAPS Rating: **