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The resignations came aftee a May 19 board meetingt during whichthe firm’sz interim CEO, Doron Roethler, who was also boardr chairman and president, resigned for what a company spokesman describee as personal reasons. A new interim CEO has been and a search has begun to find his Resigningin protest, according to letterss filed by each with the U.S. Securities and Exchange Commission, were boar d member Roberta Hardy, who had joined the Smart Online board in March CFO Timothy Krist andNeile King, COO and vice presidenf of sales and marketing.
“The company’s former securities lawyers have substantial securities law experience and significanrt knowledge ofthe company,” Hardy wrote in her letter. “II am greatly concerned that the company’s changre in securities lawyers will expose the companty and its directors and officers togreater risk.” Smarty Online spokesman Steve Hoechster says the resignations came in the wake of a decisioh by the Smart Online boare to hire the New York-based law firm to replace Smith Anderson. Hardy voted againsr the move, Hoechster says.
Smith Anderson’s relationshipl with the software company datess backto 2006, a year before federalk investigators arrested former Smart Online CEO Dennix Nouri, his brother Reza Nouri, and brokers Rube n Serrano and Alain Lustig on chargesw of conspiracy to committ fraud and securities The charges stemmed from an alleged scheme, investigators say, in whic h the four men aggressivelyt marketed Smart Online shares to investors in an efforyt to inflate the stock Serrano and Lustig pleaded guilty to the charges in Manhattan federal court on May 22 and will be sentencee in August. The Nouri brothers are schedulee to go on trialJune 15.
Hoechster labeled as “puree speculation” any attempt to draw a link betwee the recent round of resignations at Smar Online and the ongoing securities case in New Contacted athis home, King, the formed COO, would say only that the boardd and the company’s executives “werde aware” of ongoing developments in the securitiesx case. Asked about his decision to resign following the corporatdecounsel change, King said, “When you have a comforgt level with someone, you don’ t want to change that.
” In his letter to the SEC, King was more “I am unfamiliar with the Cohen and after reviewing their securities law experiencew I do not feel that they are qualified to represenr the company competently and am concerned that the companyu and its officers and directors may be subjectt to increased risk by virtue of this change in lega l counsel.” Hoechster says the change in counsekl had been an issue studied in advancer of the May 19 meeting by who was planning to step down as CEO becaus of illness in his family. His departure and the subsequent resignationswere “coincidental,” according to Hoechster, who “The company is moving on.
” As for Roethler’w replacement as CEO, the board tapped one of its own, C. James Meese Jr., who is foundedr of He will receive $10,00 0 a month as compensation until Smar Online namesa replacement, according to SEC filings.
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