Human Capital & Careers

SteelCloud Exec Felled by Options Probe

Attempts by the company's founder and chairman to exercise certain stock options came under the lens of the audit committee.
Stephen TaubJune 20, 2006

Another top executive has become a casualty of the options-pricing scandal.

SteelCloud, a supplier of server appliances, network security, and infrastructure services, announced that founder and chairman Thomas P. Dunne resigned last Friday in response to the results of an investigation by the audit committee into Dunne’s attempt to exercise certain stock options.

In a regulatory filing, SteelCloud explained that the matter was discovered through operation of the company’s internal controls and procedures. The company stressed that the matter did not result in any direct financial loss or have any direct effect on the company’s financial statements. However, as a result of the investigation, SteelCloud was unable to file its April 30 quarterly results on time.

The company also noted that Dunne denies any wrongdoing.

SteelCloud marketing director Bill Hughes told The Washington Post that the board is putting together a plan for succession. Dunne will continue to consult for SteelCloud for 23 months, the newspaper added.

According to The Wall Street Journal’s count, executives at a half-dozen companies have resigned as a result of options-related probes, including individuals at Vitesse Semiconductor, McAfee, and Mercury Interactive.

4 Powerful Communication Strategies for Your Next Board Meeting