It's great when companies take a deep, hard look at themselves in the mirror. Frequently, though, this doesn't happen until some large, negative event takes place and the company needs to react.

Comverse Technology, Inc. (OTC: CMVT) is one of these companies facing itself in the mirror. Essentially a holding company which includes one of the leading providers of value-added software and services to the telecom industry (read, voice mail and billing), a large stake in a leading surveillance technology firm, and a couple other stakes in related businesses, Comverse has had an ugly couple of years.

Its founder, Kobi Alexander, sits in Namibia avoiding extradition by US authorities. In an ultimate act of chutzpah, Alexander sued the firm this week about his severance.The stock languishes. There is certainly a lot of value here -- the question is whether the company will be able to extract the value.

Today's WSJ reports that the firm has completed an internal probe into allegations that senior management inappropriately structured stock options for their personal benefit. The results were as expected -- senior management, including Alexander, did structure options inappropriately. Additionally, a previous CFO said that Alexander had instructed him to "create desired earnings per share" by routinely making improper accounting adjustments."

So, like E Trade Financial Corporation (Nasdaq: ETFC), the company seems to be airing all its dirty laundry and kitchen-sinking all its problems.

Unfortunately, unlike E Trade, the company has not reassured investors of its restructuring plans and controls going forward.

For a company with some valuable assets, let's hope that current management can distance themselves enough from Alexander to start realizing all the firm's value.

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author's fund owns a long position in CMVT stock as of 1/30/2008.