Gaynor Lands at Sonus
As part of its fiscal fourth quarter earnings report, the optical vendor said Gaynor, who served as CFO and VP of finance and administration, would leave at the end of the month "to pursue another job opportunity." (See Sycamore Loss Widens, CFO Steps Down and Sycamore Reports Q4.)
That new job opportunity has Gaynor as the new CFO of Sonus Networks Inc. (Nasdaq: SONS), maker of next-generation voice over IP (VOIP) equipment. Beginning October 1, Gaynor will replace Ellen Richstone, who is retiring from Sonus after serving as its CFO since January 2005. (See Sonus Hires Gaynor and Sonus Appoints New CFO.)
In doing so, Gaynor will be leaving one company that has recently overcome a financial audit and restatement linked to the backdating of stock options for... another company that has recently overcome a financial audit and restatement linked to the backdating of stock options.
Gaynor led Sycamore through its internal audits and restatements after taking over for then-CFO Frances "Hide the" Jewels in October 2004. During his tenure at the optical vendor, a financial investigation revealed that Jewels deliberately altered stock option grants from 2000 through 2004. That investigation resulted in the company restating $215.6 million for fiscal years 2000 through 2007. (See Sycamore Replaces CFO, Sycamore Stays Listed, and More Rotten Bark From Sycamore.)
While Gaynor was cleaning up the books at Sycamore, Sonus was going through its own financial audit. After regulatory and media attention led to a series of investigations into stock options backdating throughout the telecom industry, the company launched its own options probe in 2006. (See Sonus Opens Options Probe and Backdating Blues.)
Sonus closed the book on its internal review of stock option grants by filing updated financial reports with the Securities and Exchange Commission (SEC) in August. (See Sonus Catches Up.)
Sonus's updated financials for fiscal 2006 and the first quarter 2007 included a $54 million non-cash charge related to the company's stock option accounting due to dating errors it found in grants from May 2000 to 2005. The company also reported a $1.4 million decrease in shareholder equity as of December 31, 2005. As a result, restated earnings were reduced by approximately $55 million for the fiscal 2000 through 2005 period.
Sonus's Richstone will be the second high-level executive to leave the company in the past month. As part of its second-quarter earnings report, Sonus announced that it was losing the services of President and COO Bert Notini, who left the company to join New York-based private equity firm New Mountain Capital and take the CEO role at systems integration company Aptus.
Notini was hired in 2004 to improve Sonus's internal operations, and he also led the company's internal options review, which began in 2006. With that review complete, however, Sonus said that Notini's role within the company was no longer necessary. (See Sonus Extends Financial Review, Sonus Opens Options Probe, Sonus Catches Up, and Sonus Finally Files Financials.)
— Ryan Lawler, Reporter, Light Reading