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Microsemi probes CEO's credentials

Posted: 10 Dec 2008     Print Version  Bookmark and Share

Keywords:academic credentials  fraud  material misrepresentation 

Microsemi Corp. is reviewing the status of the academic credentials of its president and chief executive, James Peterson.

The chip maker company intends to work to resolve the matter, after the so-called Fraud Discovery Institute questioned Peterson's credentials. The Fraud Discovery Institute also recently made a similar charge against an executive from Broadcom Corp., who eventually fired the employee.

Vahid Manian was recently fired as Broadcom's senior vice president of global manufacturing, according to the Associated Press. He falsely claimed to have degrees from the University of California at Irvine, according to the report.

Meanwhile, at Microsemi, Peterson lists degrees from Brigham Young University in government filings, but BYU claims he did not complete his degree, according to Bloomberg.

Peterson denied reports that he has misrepresented his degrees from BYU. "I am working directly with the University to clarify this situation," Peterson said in a statement this week. "It appears that the background check there may have mistakenly been made with the name 'James J. Patterson,' not mine, as stated in a Seeking Alpha report. I have every reason to expect that Brigham Young will investigate this allegation shortly and officially confirm my degrees."

Peterson also questioned the reliability of Barry Minkow, who runs the Fraud Discovery Institute. Minkow is alleged to be a convicted felon who spent seven years in prison for fraud.

''Minkow uses his tips as a means to profit from 'put options' he buys on companies he researches. He uses a disclaimer on the factual accuracy of his reports,'' according to Microsemi.

Microsemi Chairman Dennis Leibel this week said that Peterson has the ''full support'' of the board and there are no plans to alter his role as president and CEO.

''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 in a statement.

Still, the news has hurt the company's stock. ''Shares of MSCC have been hard hit following the 'he said, she said' diploma drama of the past several days,'' said Craig Berger, an analyst with FBR, in a report.

''In our view, whether Jim Peterson actually received his diplomas almost 30 years ago or not is much less important than his ability to cut costs and grow revenues at Microsemi,'' he said in the report. ''His track record over the past seven years has been very admirable in this regards. While 'Diplomagate' will create some issues for Microsemi to deal with in coming months, we believe Jim Peterson is relatively safe in his position as CEO given his board of directors' strong support, and he will likely survive this current scandal to lead the company forward in 2009 and beyond.''

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