City watchdog launches Wandisco probe
City watchdog launches Wandisco investigation as embattled cloud computing group faces $15 million fraud scandal
- Wandisco shares are currently suspended following an internal investigation
- The chief exec and CFO were forced to resign following the revelations
- The group has its own research in collaboration with FRP Advisory
The Financial Conduct Authority has launched an investigation into Wandisco following revelations of ‘fraudulent irregularities’ that led to the resignation of top executives earlier in April.
The chief executive and finance boss of the troubled AIM-listed software company resigned after an internal investigation found the group falsified nearly $15 million in revenue last year.
Wandisco told investors Thursday it was briefed by the regulator on its investigation, which was launched over concerns it may have made a “material misrepresentation of the company’s financial position” in statements made between January 1, 2022 and January 9. March 2023 were completed.
The Financial Conduct Authority has launched an investigation into Wandisco
Last month, Wandisco uncovered “potential fraudulent irregularities,” with orders leading to $14.9 million in revenue and sales entries worth $115.4 million found to be false.
Last year’s revenue should have been $9.7 million instead of $24 million, while bookings should have been $11.4 million instead of $127 million.
FRP Advisory’s findings also continue to support the initial view that one senior sales associate was responsible for the irregularities.
“FRP Advisory is continuing its investigation to reach a conclusion,” the company said at the time.
Shares of Wandisco were suspended last month after the company announced it was conducting an investigation into the company’s “true financial position.”
It came just days after Wandisco announced it was seeking an additional New York listing of its stock.
Wandisco said Thursday: “The board is working with the FCA on this, in addition to continuing to support the completion of the independent investigation already being conducted by FRP Advisory.”
The FCA declined to comment.