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ClearOne Hopeful After Court Ruling

ClearOne Hopeful After Court Ruling

The company once known as Gentner has seen some rough times in recent months. Now it says it is pleased with a court action, although its case is far from resolved.
A district court has denied a motion by the Securities and Exchange Commission for preliminary injunction against ClearOne Communications, the company said.
“The court concluded there is not a substantial and reasonable likelihood of future violations,” ClearOne stated. “The SEC also sought the appointment of a special monitor to oversee ClearOne’s operations. The court denied that request as well.”
Mike Keough, co-CEO of ClearOne, said the company retains “a solid foundation, a loyal customer base and industry-leading products.”
ClearOne has denied the SEC allegations. It earlier suspended CEO Frances Flood and CFO Susie Strohm and named an interim CFO.
“The court stated that before the SEC began to investigate, ClearOne made significant changes to its distribution model, revisions in product forecasting methods, and transitioned to 60-day payment terms, with no exceptions, for all distributors,” ClearOne said. “It also stated that the company had made management changes, including the appointment of Mike Keough, who has an extensive background in sales, to run the product division.
“While the court held that the SEC did not meet its burden for preliminary injunction, it did find some evidence of the SEC’s claims,” the company statement continued. “According to the court, preliminary injunction hearings allow for relaxed standards of evidence, which can include hearsay and affidavits that would not be permissible in a trial setting.”
Separately, ClearOne and several officers also are the subject of lawsuits charging that it caused its shares to trade at artificially inflated levels by issuing false and misleading financial and press statements.
ClearOne is a provider of multimedia conferencing products and services. It moved out of the broadcast marketplace in recent years, selling or closing its remote control and telephone product lines that had been familiar to broadcasters under the Gentner name.
ClearOne is appealing a move to de-list its common stock from the Nasdaq stock market. The company’s stock last traded in January at $1.42 compared to its one-year high of more than $18.