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Seller Beware

Beset by lawsuits and bankrupt customers, Universal Access taps new CFO. Also: Holiday RV names new finance chief, Ashford.com CFO gets fined.
Lisa YoonJune 11, 2002

>> Universal Access Global Holdings, provider of telecom connectivity services, named Randall Lay CFO… Lay most recently with Metromedia Fiber Network, where he focused on upgrading financial reporting, analysis… Before Metromedia Fiber, he spent nine years at International Specialty Products, seven of them as EVP, CFO of the specialty chemical suppler… Directed restructuring of financial, operating organization to set up svelte global enterprise resource planning (ERP) system…

Lay replaces former CFO Bob Brown, who quit in April after company revised guidance because of bankruptcies of several customers, causing stock to plummet… Since then, shareholders, who felt Universal Access failed to adequately disclose switch in business model—and the financial risks it involved—slapped company with a slew of class-action suits between April and last Friday… In statement May 10, company said suits were without merit and that it planned to defend self vigorously…

>> Anthony D. Borzillo hitching up with recreational-vehicle dealer Holiday RV Superstores Inc. as VP and CFO… Besides overseeing finance at company, which sells RVs under Recreation USA name, Borzillo will act as chief accounting officer…

How Startup CFO Grew Food Company 50% YoY

How Startup CFO Grew Food Company 50% YoY

This case study of JonnyPops’ success highlights the unusual financial and operational strategies that enabled rapid expansion into a crowded and highly competitive frozen treat market. 

Before joining company, Borzillo was corporate controller and director of financial planning at aviation-services provider Timco Aviation Services Inc…. Was responsible for internal and external financial reporting, companywide internal controls, and budgeting process… Before that, was an auditor with Arthur Andersen LLP…

>> Former CEO and former CFO of Internet jewelry retailer Ashford.com settled Securities and Exchange Commission fraud accusations in Federal District Court in Washington… Former finance chief Brian E. Bergeron agreed to pay $25,000, and former chief executive Kenneth E. Kurtzman agreed to pay $60,000 for misleading auditors on pro forma earnings…

According to SEC, Ashford made deal with Amazon.com in which Amazon paid $600,000 to Ashford, while it got noncash credits related to a promotional deal by the two companies… But after deal was settled, Ashford realized it wouldn’t meet targets for fiscal year about to end March 31, 2000… So it persuaded Amazon to split payment into two letters: one that made it seem Ashford made out nicely in getting the cash, and the other showing the actual costs of the marketing campaign… Guess which one Ashford showed to its auditors? As a result, Ashford announced that it had exceeded the pro forma guidance it had given to analysts, beating expectations by a penny a share…

For its part, Amazon got off with slap on the wrist, accepting cease-and-desist order from the SEC, barring it from helping others violate securities laws.