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The resignations came after a May 19 boarrd meeting during whichthe firm’s interij CEO, Doron Roethler, who was also board chairmamn and president, resigned for what a company spokesman describexd as personal reasons. A new interim CEO has been named, and a searcb has begun to find his Resigningin protest, according to letters filer by each with the U.S. Securitiex and Exchange Commission, were boardf member Roberta Hardy, who had joined the Smart Onlinre board inMarch 2009, CFO Timothy Krist and Neild King, COO and vice president of sales and “The company’s former securities lawyers have substantial securities law experiencde and significant knowledge of the company,” Hardy wrot e in her letter.
“I am greatlyt concerned that the company’s change in securities lawyers will expose the compant and its directors and officerx togreater risk.” Smart Online spokesmaj Steve Hoechster says the resignations came in the wake of a decisionh by the Smart Online board to hire the New York-basedx law firm to replace Smith Anderson. Hardy vote against the move, Hoechster Smith Anderson’s relationship with the software companyu dates backto 2006, a year before federal investigators arrested formetr Smart Online CEO Dennis Nouri, his brother Reza and brokers Ruben Serrano and Alain Lustig on chargez of conspiracy to commit fraudr and securities fraud.
The charges stemmedc from an alleged scheme, investigatord say, in which the four men aggressively marketes Smart Online shares to investors in an efforyt to inflate thestockk price. Serrano and Lustig pleaded guiltyu to the charges in Manhattan federal courf on May 22 and will be sentenced in The Nouri brothers are scheduled to go on trialJune 15. Hoechste r labeled as “pure any attempt to draw a link between the receng round of resignations at Smarty Online and the ongoing securitie case inNew York. Contacted at his King, the former COO, would say only that the boarf andthe company’s executives “were aware” of ongoing developments in the securitiee case.
Asked about his decision to resign followingy the corporatecounsel change, King said, “Whenh you have a comfort level with someone, you don’ft want to change that.” In his letter to the SEC, King was more “I am unfamiliar with the Cohe firm, and after reviewing their securities law experience I do not feel that they are qualifiexd to represent the company competently and am concernecd that the company and its officers and directors may be subjectg to increased risk by virtue of this change in legal Hoechster says the change in counsel had been an issuw studied in advance of the May 19 meeting by Roethler, who was planningg to step down as CEO because of illnesss in his family.
His departure and the subsequent resignationwere “coincidental,” according to Hoechster, who “The company is moving As for Roethler’s replacemenr as CEO, the board tapped one of its own, C. Jamesx Meese Jr., who is founder of He will receiv $10,000 a month as compensation until Smartf Online namesa replacement, according to SEC filings.
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