Bridgewater-based Synchronoss Technologies Inc. and seven senior employees — including the company’s former CFO — were charged June 7 by the Securities and Exchange Commission with alleged accounting-related misconduct that ran from 2013 to 2017.

Founder and former CEO Stephen Waldis, while not charged with misconduct, agreed to reimburse the company for more than $1.3 million in stock sale profits and bonuses.

Additionally, the SEC filed a complaint in federal district court in Manhattan against former CFO Karen Rosenberger and former Controller Joanna Lanni, alleging that Rosenberger engaged in fraud on multiple transactions and that she misled Synchronoss’ auditor. Lanni is accused of improper accounting for one transaction.

“Investors are entitled to rely on financial statements that are free of accounting improprieties, and when an issue and its executives and employees engage in accounting gimmicks, we will use every available tool, including significant corporate penalties and individual accountability, to address such misconduct,” said Gurbir Grewal, director of the SEC’s Division of Enforcement, and a former New Jersey attorney general. “Today’s action should also put public company executives on notice that even when they are not charged with having a role in the misconduct at issue, we will still pursue clawbacks of compensation under SOX 304 to ensure they do not financially benefit from their company’s improper accounting.”

In July 2018, Synchronoss announced a restatement of its audited financial statements for the fiscal years ended Dec. 31, 2015, and 2016, and restated selected financial data for the fiscal years ended 2013 and 2014 totaling approximately $190 million in revenues.

Synchronoss acknowledged it had accounted for numerous transactions improperly and thus filed materially misleading financial statements with the SEC.

Without admitting or denying the SEC’s findings, the company has agreed to cease and desist from violating Section 10(b) of the Securities Exchange Act of 1934 and other provisions of the law, and to pay a civil penalty of $12.5 million. The following parties also agreed to settle:

• Ronald Prague, the company’s former general counsel, settled charges stemming from his involvement, along with others, in misleading the company’s auditors regarding two transactions and to pay a civil penalty of $25,000 and to be suspended from appearing and practicing before the SEC as an attorney for 18 months.
• Former senior employees of the company Clayton “Charlie” Thomas, Marc Bandini and Daniel Ives, along with current employee John Murdock, settled charges from their participation in at least one side letter agreement that concealed the revenue that Synchronoss recognized upfront was in fact contingent on future events and to pay civil penalties ranging from $15,000 to $90,000.

The SEC says that the impact of the improper accounting was material and, in many instances, allowed the company to meet earnings targets.