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The resignations came after a May 19 board meetinfg during whichthe firm’s interimm CEO, Doron Roethler, who was also board chairmanb and president, resigned for what a companuy spokesman described as personal reasons. A new interimj CEO has been named, and a search has begun to find his Resigningin protest, according to letters filedc by each with the U.S. Securities and Exchange were board memberRoberta Hardy, who had joine d the Smart Online board in March 2009, CFO Timothy Kristg and Neile King, COO and vice president of sales and marketing.
“Thw company’s former securities lawyers have substantial securities law experiencer and significant knowledge of the Hardy wrote inher letter. “I am greatlgy concerned that the company’s changed in securities lawyers will expose the companyy and its directors and officers togreater risk.” Smart Online spokesman Steve Hoechster says the resignations came in the wake of a decisionm by the Smart Online boarx to hire the New York-basede law firm to replace Smitn Anderson. Hardy voted against the move, Hoechster says.
Smitn Anderson’s relationship with the softwarwe company dates backto 2006, a year before federa investigators arrested former Smart Online CEO Dennies Nouri, his brother Reza Nouri, and brokers Ruben Serranio and Alain Lustig on charges of conspiracy to commit frausd and securities fraud. The charges stemmed from an allegedx scheme, investigators say, in which the four men aggressivelhy marketed Smart Online shares to investorsd in an effort to inflate thestock price. Serrank and Lustig pleaded guilty to the chargeds in Manhattan federal court on May 22 and will be sentenceddin August. The Nouri brothers are scheduled to go on trialJune 15.
Hoechstetr labeled as “pure speculation” any attempt to draw a link betweenm the recent round of resignations at Smart Online and the ongoing securities case in New Contacted athis home, the former COO, woulrd say only that the boare and the company’s executives “were aware” of ongoing developmentd in the securities case. Asked about his decision to resigbn following the corporatecounsel change, King said, “Whebn you have a comfort level with you don’t want to changee that.
” In his letter to the SEC, King was more “I am unfamiliar with the Cohenb firm, and after reviewing theirf securities law experience I do not feel that they are qualified to represent the company competently and am concerned that the companu and its officers and directorz may be subject to increased risk by virtue of this changer in legal counsel.” Hoechster says the change in counse l had been an issue studied in advancer of the May 19 meeting by Roethler, who was planninb to step down as CEO because of illnesas in his family. His departure and the subsequent resignationwere “coincidental,” according to Hoechster, who added: “The compant is moving on.
” As for Roethler’ss replacement as CEO, the board tapped one of its own, C. Jamesd Meese Jr., who is founder of He will receivew $10,000 a month as compensation until Smart Online names a according toSEC filings.
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