SOUTHFIELD – TechTeam Global announced Tuesday that Chief Finanical Officer David Morgan resigned last week as the company looks into allegations he leaked confidential information to the company’s largest shareholder, which has been waging a hostile takeover of TechTeam.
An 8k filing with the Securities and Exchange Commission also said that potential misconduct by Morgan did not relate to TechTeam’s financial statements, and therefore, the integrity of the company’s financial statements is not in question. Wall Street reacted Tuesday by driving down shares of TechTeam to $10.41, down 6.22 percent on the day.
TeamTeam also disclosed its board had asked Costa Brava Partnership III, TechTeam’s largest shareholder, for a delay in concluding an agreement on a unity slate of board candidates pending the outcome of the investigation. In February, Costa Brava said it intended to nominate a slate of directors to replace the entire TechTeam Board at the Company’s annual shareholder meeting. The unity slate talks ended Friday.
“We have serious concerns about the potential misconduct, and we are working to finalize our investigation so we can understand the full ramifications of the potential misconduct both inside and outside the Company,” said Board Chairman Kim Cooper. “So we informed Costa Brava that we felt it necessary to wait until our independent legal counsel completes its inquiry into possible unauthorized disclosure of confidential information to Costa Brava.
“In view of the circumstances, we are both disappointed and puzzled that Costa Brava elected to unilaterally terminate discussions,” Cooper said. “We had hoped that they would agree to delay their plan to wage a proxy contest until the relevant facts could be discovered. Pending the outcome of the inquiry, the Board may wish to seek a resumption of discussions with Costa Brava.”
Morgan was suspended March 29 and resigned April 1. Marc Lichtman, who has been TechTeam’s Vice President and Chief Accounting Officer since 2004, will continue to oversee the Company’s financial functions.
The internal investigation of Morgan’s alleged conduct is led by David Bohan, a partner at Sachnoff & Weaver, a Chicago law firm retained late last year as independent counsel to the TechTeam Board. Bohan is a Harvard Law School graduate and a former federal prosecutor who heads his firm’s Securities Litigation and Regulation Practice Group. He has experience in conducting internal corporate investigations on behalf of corporate boards.
