During a routine financial review by On Technology's director of finance, Stephen Wietrecki, the misappropriation of an estimated $300,000 of company funds was uncovered. The company's attorneys reported the matter to the U.S. Attorney's Office in Boston.
During the investigation, On Technology's former CFO, John Bogdan, who officially announced his resignation on Monday, admitted to misappropriating company funds, the company said in a statement. When Bogdan announced his resignation on Monday, he said it was for personal reasons.
The misappropriation is suspected to have taken place over the past 12 months, the company said. At the moment, the company doesn't see any reason to suspect that other employees were involved.
The Cambridge, Massachusetts-based company said the situation would not affect its ability to conduct business. Shares of the company fell 5.26 percent, off 0.125 at 2.25 in afternoon trading.
"Because of this ongoing investigation, we will not comment on the exact nature of the misappropriation or the disposition of the funds," On Technology CEO Herman DeLatte said in a statement. In addition, DeLatte said the company is "financially sound" and that the missing funds will have "little impact" on its financial position.
Wietrecki has taken on Bogdan's responsibilities for the interim. At present, DeLatte said the company hasn't formalized a search for a new CFO, but will be looking for a replacement.
The company's outside legal counsel, Epstein, Becker, & Green and Ernst & Young will complete a formal investigation.
On Technology, which provides scalable desktop management services and products for enterprise networks, was founded in 1985 by Lotus Development founder and creator Mitch Kapor. Kapor created the Lotus 1-2-3 spreadsheet application and On Technology's workgroup applications and LAN, or local area networks utilities.