SEC Settles Enforcement Action Against CoPresident of Gemstar/TV Guide

SEC NEWS DIGEST
Issue 2004-153 August 10, 2004

The Commission today announced that Peter C. Boylan, a former senior
executive of Gemstar-TV Guide International, Inc. and its wholly owned
subsidiary, TV Guide, Inc., has agreed to settle the federal court
action filed by the Commission. As part of the settlement, Boylan will
consent to a fraud injunction, without admitting or denying the
allegations in the Commission's complaint, and will pay a total of
$600,000 in disgorgement and civil penalties. The settlement is subject
to approval by the court.

Gemstar is a Los Angeles-based media and technology company that, among
other things, publishes TV Guide magazine and develops, licenses, and
markets an interactive program guide (IPG) for televisions that enables
consumers to navigate through and select television programs. During
the relevant period, Gemstar generated revenues from the IPG by
licensing the technology to third parties and selling advertising on the
IPG. In statements to securities analysts and the investing public,
Gemstar repeatedly touted the IPG technology and IPG advertising
revenues as the company's future and as the "value driver" of the
company's stock, and downplayed expected declines in revenue from TV
Guide magazine.

Boylan, of Tulsa, Oklahoma, is the former co-president, co-chief
operating officer and a member of the board of directors of Gemstar and
the former co-chairman, chief executive officer, and co-president of
Gemstar's wholly owned subsidiary, TV Guide. The Commission's complaint
alleges that from June 1999 through September 2002, Gemstar overstated
its total revenues by at least $248 million to meet its ambitious
projections for revenue growth from IPG licensing and advertising. The
complaint further alleges that Boylan participated in Gemstar's
fraudulent reporting of transactions relating to IPG advertising.
According to the complaint, Boylan structured two transactions so that a
portion of the amount to be paid to Gemstar was nominally and
artificially allocated to the sale of IPG advertising. The complaint
also alleges that in press releases, conference calls with securities
analysts, and annual reports filed with the Commission, Boylan omitted
to disclose material information regarding the transactions. The
complaint charges Boylan with securities fraud, falsifying Gemstar's
books and records, and aiding and abetting Gemstar's reporting and
record-keeping violations, in violation of Sections 10(b), 13(a),
13(b)(2)(A), and 13(b)(5) of the Securities Exchange Act of 1934 and
Rules 10b-5, 12b-20, 13a-1, and 13b2-1 thereunder.

If approved by the court, Boylan will be enjoined from future
violations, or aiding and abetting violations, of the above provisions
of the federal securities laws. Boylan is also agreeing to pay
disgorgement of $300,000 and a civil penalty of $300,000. The
Commission will seek to have this money included in a fund established
for harmed shareholders of Gemstar pursuant to Section 308 of the
Sarbanes-Oxley Act of 2002.

The Commission's action is pending against four other former executives
of Gemstar: Henry C. Yuen, former chief executive officer; Elsie M.
Leung, former chief financial officer; Jonathan B. Orlick, former
general counsel; and Craig Waggy, former CFO of TV Guide. The court has
scheduled the trial of this matter to begin on January 18, 2005. On
June 30, 2004, the court entered a final judgment of permanent
injunction against Gemstar as part of a settlement in which the company
agreed to pay a $10 million civil penalty to be distributed to harmed
shareholders pursuant to Section 308 of the Sarbanes-Oxley Act. [SEC v.
Peter C. Boylan, Civil Action No. CV 04-6569 FMC (MANx) C.D. Cal.] (LR-
18826)