Ex-GC of New Jersey Software Firm Settles Fraud Claims for $25,000

As part of a settlement with the U.S. Securities and Exchange Commission, a Bridgewater based software company’s former general counsel will pay a $25,000 civil penalty and be suspended from practicing before the federal agency for 18 months.

Ronald Prague, who departed Synchronoss Technologies in 2021 after 15 years with the company, is one of seven senior employees the SEC alleged played a role in accounting misconduct between 2013 and 2017.

The SEC also charged the company, which is settling by agreeing to pay a $12.5 million penalty, without admitting or denying the allegations.

Prior to joining Synchronoss, Prague was an in-house attorney at Intel Corp., according to his LinkedIn. 

The other senior employees include former chief financial officer Karen Rosenberger and former controller Joanna Lanni, both of whom are defendants in a federal complaint the SEC filed Tuesday in the Southern District of New York.

The complaint alleges Rosenberger helped the company file false financial disclosures about multiple transactions between 2015 and 2017, and engaged in fraud with respect to three transactions. Two involved one of the company’s largest customers, while one concerned an acquisition.

Rosenberger also tried to cover up the misconduct by lying to Synchronoss’s auditor, the complaint alleged, adding that Lanni was involved in improper accounting for one transaction.

This misconduct resulted in the company improperly recording about $26 million in revenue.

Prague is not mentioned in the complaint. 

The remaining four senior employees also settled their charges.

“Investors are entitled to rely on financial statements that are free of accounting improprieties, and when an issuer 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,” Gurbir Grewal, director of the SEC’s division of enforcement and former attorney general of New Jersey, said in a statement Tuesday.

“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.”

Jeff Miller, president and CEO of Synchronoss, said in a statement, “This matter relates to historical transactions that the Company restated almost four years ago, and Synchronoss believes that reaching this resolution now is the right outcome for our shareholders, customers and key stakeholders.”

Company founder and former chief executive officer Stephen Waldis was not charged with misconduct but agreed to reimburse the company for more than $1.3 million in stock sale profits and bonuses. He has also agreed to return previously granted shares of company stock.