Taro Financial Chief Resigns

Kevin Connelly steps down after a law firm's review of the company's past results.
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Taro Pharmaceutical Industries

(TARO) - Get Report

said its chief financial officer resigned amid an investigation into the company's restatement of its earnings for 2003 and 2004.

Kevin Connelly, the company's senior vice president and CFO, as well as another member of Taro's financial management, resigned effective immediately.

The two stepped down following a report by independent law firm Jenner & Block, which found that members of the company's financial management team caused Taro to make misleading statements to the

Securities and Exchange Commission

.

The Taro financial managers made "misrepresentations" in correspondence with members of the SEC's staff and its independent auditor Ernst & Young, the company said in a press release Monday.

No other employees were singled out in the law firm's report.

Both Connelly and the other individual strongly disagreed with Jenner & Block's findings, Taro said.

Jenner & Block didn't find that the company's 2003 and 2004 financial statements intentionally misstated reserves relating to sales to wholesale customers, Taro said.

The company, which is at risk of being delisted from the

Nasdaq

, has submitted the results of the investigation to a listing qualifications panel as part of a request for continued listing.

If the shares are removed, the company says it will reapply for listing.

Taro says it will immediately initiate a search for a new CFO.

Shares fell 2.6% to $11.70 in premarket trading.