The Securities and Exchange Commission (SEC) issued more than $500,000 in penalties and fines to the former chief financial officer at a tech company for allegedly falsifying financial statements and lying to the company’s auditor.
The SEC received a final judgment Friday in its case against former Synchronoss Technologies CFO Karen Rosenberger, filed in U.S. District Court for the Southern District of New York, the agency said in an administrative proceeding. In addition to imposing an injunction and an officer and director bar against Rosenberger, the SEC also fined her $125,000. She also agreed to return $430,000 in compensation to Synchronoss, pursuant to the Sarbanes-Oxley Act.
In June 2022, Synchronoss reached a $12.5 million settlement with the SEC for engaging in “long-running accounting improprieties” that involved materially misleading financial statements filed from 2013-17. Seven Synchronoss executives, including Rosenberger, were charged in connection with the case.
The details: In its complaint, the SEC alleged that Rosenberger engaged in accounting misconduct which overstated Synchronoss’s revenue in false financial statements, which allowed the company to meet revenue expectations it otherwise would not have met. The false statements related to five total transactions, including two with one of the company’s largest customers, and another related to Synchronoss’ sacquisition of another company, the SEC said.
The SEC further alleged that Rosenberger “sought to cover up her and Synchronoss’s misconduct by lying to Synchronoss’s auditor in connection with those transactions, falsifying books and records, and by failing to implement or maintain, and circumventing, Synchronoss’s system of accounting controls.”
Former Synchronoss general counsel and chief legal officer Ronald Prague previously settled charges stemming from his involvement in misleading auditors regarding two transactions and was ordered to pay a civil penalty of $25,000, while founder and former chief executive Stephen Waldis agreed to reimburse more the $1.3 million in stock sale profits and bonuses without being charged and return previously granted shares of company stock pursuant to the Sarbanes-Oxley Act.
Synchronoss did not respond to a request for comment.
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