Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Banned.......Replies to the A@P thread. -- Ignore unavailable to you. Want to Upgrade?

To: ravenseye who wrote (3559)	4/19/2005 11:38:50 PM
From: StockDung	Respond to of 5425

Xybernaut fires CEO, president Company's auditor resigns, 3 board members offer to quit By Jennifer Inez Ward, MarketWatch Last Update: 11:32 PM ET April 19, 2005 E-mail it \| Print \| Alert \| Reprint \| SAN FRANCISCO (MarketWatch) -- Xybernaut Corp. said Tuesday night it has fired Chief Executive and Chairman Edward Newman, and President and Chief Operating Officer Steven Newman, after an audit committee investigation found numerous irregularities. Retired Army Gen. William Tuttle was appointed interim chairman and CEO, the company said. The Newmans are brothers, according to company (XYBRE: news, chart, profile) documents on file with the Securities and Exchange Commission. Xybernaut also said its independent auditor, Grant Thornton LLP, has resigned. Three directors, James Ralabate, Edwin Vogt and Martin Weisberg, offered to resign, but Xybernaut said it has deferred acceptance. Xybernaut said it does not know when its 2004 10-K will be filed with the Securities and Exchange Commission. The Fairfax, Va.-based company said its audit committee and independent counsel on Feb. 28 began investigating documentation of the chairman's and chief executive's expenses and management's conduct in response. Xybernaut said the investigation determined, among other things, that Edward Newman "improperly used substantial company funds for personal expenses and failed properly to substantiate expenses charged to the company." The committee also determined members of Newman's family employed by the company were hired and evaluated, or not evaluated, in direct violation of its anti-nepotism policy. The family members also constituted a "protected class" of employees, the company said in a statement. The investigation also concluded there was a lack of adherence to effective controls governing the company's public disclosures and press releases. The company said the board asked for both Newmans to resign as directors. "Neither individual has agreed to resign from the board at this time," the company said. The board has also authorized the retention of financial experts to assist it in maximizing shareholder value. Xybernaut said that after Grant, Thornton LLP was told the results of the investigation, the accounting firm told the audit committee's counsel that "certain members of senior management failed to disclose facts material to the financial statements and the weaknesses in the internal controls." Earlier this month, the wearable computer-maker disclosed that on Feb 1 it received a subpoena from the Northeast regional office of the SEC seeking " ... documents and other information relating to the sale of company securities by any person identified as a selling shareholder in any company registration statement or other public filing." See full story. On Feb. 17, in response to shareholder inquiries, the company said in a statement that it knew of no business reason or financial condition that would explain the recent decline in its stock price. On Tuesday Xybernaut shares closed down a penny to 25 cents a share. Jennifer Inez Ward is a reporter for MarketWatch in San Francisco.