Another Exec Bites the Stock Options Dust

Staff Reporter -- Electronic News, 6/20/2006

There’s no silver lining for Thomas P. Dunne, founder of SteelCloud Inc., the latest company to be hit by the ongoing stock option granting practices controversy.

Dunne resigned his post as chairman of the supplier of turnkey server appliances, network security and infrastructure management solutions on June 16, the company has reported. The exit announcement came in response to the results of an investigation by the company’s audit committee relating to matters associated with the attempted exercise of certain employee stock options owned by Dunne

SteelCloud stated that the matter was discovered through operation of its internal controls and procedures and did not result in any direct financial loss or have any direct effect on the company's financial statements.

While Dunne denies any wrongdoing, he and the company have entered into an agreement for the resignation, a copy of which is planned to be filed with the Securities and Exchange Commission today.

Because of the investigation SteelCloud did not file its Form 10-Q for its fiscal Q2 ended April 30, which was due June 14. The company said that because the investigation is ongoing, it cannot predict when it will file its Form 10-Q.

SteelCloud joins the likes of Maxim, Xilinx and KLA-Tencor in the unfolding investigation of stock option granting practices.