SEC Whistleblower Lawyer Blog
The SEC (Securities & Exchange Commission) has filed a summary judgment against two former employees of Bridgewater, NJ-based Synchronoss Technologies, Inc. They are the former CFO, Karen Rosenberger, and the former Synchronoss controller, Joanna Lanni. The two engaged in accounting misconduct that led to the company’s overstatement of revenue. This led to the company meeting revenue expectations that it would not have otherwise.
The SEC’s complaint details that Rosenberger aided and abetted the company’s public filing of false financial statements regarding five of Synchronoss’ transactions and engaged in fraud with three of them. The company had to later restate the five transactions. Two of these transactions were with AT&T, one of Synchronoss’s largest customers. Another transaction involved the company’s acquisition of another business.
The SEC also alleges that Rosenberger worked to conceal both her misconduct and the company’s when she lied to the auditor about those transactions. This led to falsifying Synchronoss’ books and records, circumventing the company’s accounting controls by failing to implement or maintain correct records.
Additionally, the SEC alleges that Lanni assisted and encouraged incorrect revenue recognition, falsified the company’s books and records, and circumvented the company’s accounting controls. She also provided a misleading memorandum to the auditor for one of the five disputed transactions. The impact of the incorrect accounting had material repercussions, such as falsely meeting revenue expectations when it did not.
These issues were uncovered in an internal investigation in 2018, after both women left the company.
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