Last fall, I wrote a series of posts about events surrounding the suicide of ReiJane Huai, the former CEO of data storage vendor FalconStor Software, who had admitted to paying $185,000 in bribes to an employee of JPMorgan Chase to secure millions of dollars worth of business for FalconStor. It seems an update is in order.
FalconStor on Wednesday announced that it had reached agreements with the U.S. Attorney’s Office for the Eastern District of New York, and the Securities and Exchange Commission, to settle the authorities’ investigations of the bribery scandal. Those agreements cost FalconStor $5.8 million, a sum it probably felt was well worth paying to get this ordeal behind it once and for all. But it was an earlier development that stands to really break FalconStor from its seedy past, and that I find much more interesting.
A month earlier, on May 25, FalconStor had made a seemingly routine announcement in a press release blandly headlined, “FalconStor Announces Executive Change.” Effective that day, the company said, “Bryan Urquhart resigned from his position as Vice President, Treasurer and Chief Financial Officer of FalconStor.” CEO Jim McNiel followed that one-liner with the perfunctory, “We wish Bryan all the best for the continuation of his career and thank him for his contribution and services to FalconStor.”https://o1.qnsr.com/log/p.gif?;n=203;c=204663295;s=11915;x=7936;f=201904081034270;u=j;z=TIMESTAMP;a=20410779;e=iThe rest of the story — the part that’s not in the press release — is what makes this announcement so interesting. Urquhart had only been in FalconStor’s CFO seat for six months before he … um … “resigned.” In a post on November 14, “Suicide Victim’s Successor Hires Former CA Exec in Wake of Bribery Scandal,” I wrote about McNiel’s astonishing decision to hire Urquhart as CFO to help clean up the mess. As I noted in that post, Urquhart had been senior vice president of finance and administration at CA for at least part of the time that the accounting fraud that landed CA CEO Sanjay Kumar in prison was taking place. So I was incredulous that of all the people FalconStor could have brought in to fix the problems, it was this guy.
I don’t know what Urquhart is doing now. I’m not exactly on his go-to list of people to talk to, after having exposed his blatant deception in my post, “Better-Scrubbed Hands Needed to Clean up FalconStor Mess.” I do know that Urquhart hasn’t demonstrated a great deal of eagerness to let the world know that he “resigned” as CFO of FalconStor last month. As of Wednesday night, Urquhart’s LinkedIn page listed him as the current FalconStor CFO. Bryan, if you’re reading this, update the page, dude. It’s over. You’re out. Deal with it.
I would love to one day learn what McNiel was thinking when he brought Urquhart in, and how long it took for it to dawn on him that that might not have been such a great idea. Until then, let’s just hope, for the sake of FalconStor’s employees, customers and shareholders, that the FalconStor management team has finally gotten its act together.