The stock was the biggest percentage decliner on the Nasdaq Wednesday after the Melville, N.Y.-based maker of data protection applications announced the surprise resignation of ReiJane Huai, its CEO, president and chairman, after Huai apparently disclosed that "improper payments were allegedly made" in connection with a single customer's contract.
The company said it's cooperating with law enforcement on the ongoing probe of the alleged payments, and that it's appointed its own special committee to conduct a "full internal investigation" of the matter.
FalconStor also quickly put in place an interim CEO and president, James McNeil, its current chief strategy officer, and named CFO James Weber to the added role of chief operating officer on an interim basis. Board member Eli Oxenhorn was named non-executive chairman.
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