At a Glance

  • The U.S. Securities and Exchange Commission (SEC) said in a Friday press release that former Synchronoss Technologies CFO Karen Rosenberger has agreed to paya $125,000 civil penaltyto settle litigation related to her accounting misconduct. The settlement was finalized by a final judgment in the U.S. District Court for the Southern District of New York.
  • The SEC's charges against the former CFO alleged that Rosenberger's accounting misconduct contributed to inflated revenue at Synchronoss, the press release noted.
  • Rosenberger neither admitted nor denied the allegations in the complaint but consented to the final judgment. The former CFO was also required to return part of her compensation to the Bridgewater, New Jersey-based personal cloud solutions provider and was barred from serving as an officer or director.

Deep Dive

Under the judgment, Rosenberger must pay the $125,000 civil penalty in two or more installments, with $31,250 due within 30 days of the final judgment and the remaining $93,750 due within 12 months.

Regarding the compensation clawback to Synchronoss, Rosenberger must pay the company $107,685.25 within 30 days of the final agreement, with the remaining $323,055.75 due within 12 months, per the June judgment.

The civil penalty was imposed after the court issued a partial summary judgment in January in the SEC's case against the former CFO. Judge Denise Cote found there was sufficient evidence that Rosenberger was involved inSynchronoss's improper accounting treatment of certain transactions, CFO Dive previously reported. The lawsuit alleged that Rosenberger "aided and abetted" the inclusion of materially false financial information in five public company filings.

The partial judgment involved two of five transactions, and the judge found Rosenberger mustreturn $430,741 to Synchronoss, an amount related to incentive-based compensation she received from the company, including bonuses, profits from stock sales, and more.

The SEC's complaint also alleged that the former CFO attempted to conceal the misconduct by lying to Synchronoss's auditors and falsifying books and records, CFO Dive reported in January. According to the SEC complaint, Rosenberger first joined Synchronoss in 2000 and served as CFO from April 2014 until her resignation in February 2017.

The SEC filed the lawsuit against the former CFO and former Synchronoss controller Joanna Lanni after reaching a settlement with Synchronoss in 2022 over allegations of "long-running accounting violations" between 2013 and 2017. The software provider agreed to pay a $12.5 million penalty but did not confirm or deny the SEC's allegations.

Following the January ruling, the court issued a final judgment in April against Synchronoss's former controller, with Lanni agreeing to pay a total of $20,000 in civil penalties without admitting or denying the allegations. Lanni served as Synchronoss's controller from 2014 to mid-2017, overseeing daily accounting operations and reporting directly to Rosenberger.

Rosenberger's attorneys and the SEC did not immediately respond to requests for comment. Synchronoss also did not immediately respond to a request for comment.