Dive Brief:

• Ex-Synchronoss CFO Karen Rosenberger agreed to pay $125,000 in civil penalties relating to accounting misconduct as part of a final judgment by the U.S. District Court for the Southern District of New York, the Securities and Exchange Commission said in a Friday press release.
• The SEC’s case against the ex-CFO alleged Rosenberger engaged in accounting misconduct which contributed to the overstatement of revenue by Synchronoss, according to the release.  
• Without admitting or denying the charges brought in the complaint, Rosenberger consented to the final judgment. The ex-CFO is also required to reimburse the Bridgewater, New Jersey-based personal cloud solutions provider for certain compensation and is barred from serving as an officer or director.

Dive Insight:

Rosenberger is required to pay the $125,000 in civil penalties in two or more installments, with $31,250 to be paid within 30 days of the final judgment and $93,750 to be paid within 12 months.

Regarding reimbursement of her compensation to Synchronoss, Rosenberger will be required to pay the company $107,685.25 within 30 days of the final agreement and the remaining $323,055.75 within 12 months, per the June judgment.    

The imposing of civil penalties comes after the court granted the SEC a partial summary judgment in its case against the ex-CFO in January, where Judge Denise Cote found sufficient evidence that Rosenberger had participated in Synchronoss’ improper accounting methods for certain transactions, CFO Dive previously reported. The suit alleged Rosenberger “aided and abetted” in the inclusion of materially false financial information in five public company filings.

The partial judgment concerned two of the five transactions, with the judge concluding that Rosenberger was required to reimburse Synchronoss $430,741 relating to incentive-based compensation she received from the company in the form of bonuses and profits from the selling of shares among other methods.   

The SEC’s complaint also accused the former CFO of attempting to cover up the misconduct by lying to Synchronoss’ auditor and of falsifying books and records, CFO Dive reported in January. Rosenberger first joined Synchronoss in 2000, serving as its CFO from April 2014 until her resignation in February 2017, according to the SEC’s complaint.  

The commission brought charges against the ex-CFO, as well as Synchronoss’ former controller Joanna Lanni, after settling with Synchronoss in 2022 over allegations of “long-running accounting impurities” between 2013 and 2017. The software provider agreed to pay a penalty of $12.5 million without confirming or denying the SEC’s charges.

Following the January ruling, the court in April entered a final judgment with Synchronoss’ former controller, where Lanni agreed to pay civil penalties totaling $20,000 without admitting or denying the charges. Lanni acted as Synchronoss’ controller from 2014 until mid-2017 and was responsible for day-to-day accounting operations, reporting directly to Rosenberger.

Attorneys for Rosenberger and the SEC did not immediately respond to requests for comment. Synchronoss did not immediately respond to requests for comment.