Former CFO of Synchronoss Technologies, Karen Rosenberger, has been alleged to have overstated the company’s finances in order to meet revenue expectations. The Securities and Exchange Commission (SEC) recently obtained partial summary judgment against Rosenberger, aided by financial controller Joanna Lanni. The SEC claimed that the two engaged in accounting misconduct by filing false financial statements with the SEC and committing fraud.
According to the SEC, Rosenberger tried to cover up her misconduct by lying to the company’s auditor, falsifying its books and records, and circumventing the firm’s system of financial controls. The court granted the SEC’s motion, finding Rosenberger liable for fraud and ordering her to reimburse Synchronoss $430,741.
In another case, Comer Capital Group, a municipal bond advisor based in Mississippi, and its managing partner Brandon Comer, agreed to pay disgorgement fees of $25,000 and civil penalties totaling $50,000. The SEC charged them with breaching fiduciary duty in connection with a $6 million bond offering. The SEC alleged that Comer failed to protect the interests of his client, the Harvey Public Library District in Illinois, by not advising them to find a different or additional underwriter or broker-dealer when the underwriter had difficulty finding investors. The mispricing of the bonds would cause the Library District to pay over $500,000 in additional interest.
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued an alert to financial services companies regarding the use of spurious non-profit organizations in financing Israeli extremist settler violence against Palestinians in the West Bank. FinCEN urged financial institutions to apply a strict risk-based approach to customer due diligence requirements when dealing with charities and not-for-profit organizations.
In addition, FinCEN identified Al-Huda Bank, an Iraqi financial services company, as a primary money laundering concern. The bank had allegedly exploited its access to U.S. dollars to fund organizations including Iran’s Islamic Revolutionary Guard Corps and Iran-aligned Iraqi militias. The Treasury Department’s Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, stated that Iran used the bank to channel funds for destabilizing activities.
These cases highlight the importance of financial regulation and the consequences of fraudulent and misconduct practices. It is crucial for companies to maintain transparency in their financial reporting and for financial institutions to be vigilant in identifying and reporting potential suspicious activities.
