A local technology firm is facing a U.S. Securities and Exchange Commission inquiry related to concerns raised by a board member last year.
Lanham-based Integral Systems, which largely builds satellite ground systems, disclosed in a March 7 filing that it was under formal investigation by the SEC. The investigation centers on complaints in a letter written by former board member Bonnie K. Wachtel about changes to the structure of the board, the appropriateness of actions of a company vice president and decisions made by then-CEO Steven R. Chamberlain, including one not to vigorously pursue the sale of the company.
Chamberlain later pleaded guilty to a fourth-degree sex offense involving a minor in May 2006 and resigned from his position.
The company and some of its officers have received subpoenas and have cooperated with the investigation, the filing said.
Integral spokeswoman Tory Harris did not respond to e-mail and phone inquiries Friday and referred questions to CEO Pete Gaffney, who was not available for comment.
“It’s very unfortunate the commission felt they had to take that step,” Wachtel said in an interview Monday of the SEC investigation. “I don’t know what kind of cooperation [the SEC] has been getting … but I think that it’s unfortunate for shareholders that this seems to be increasing in seriousness.”
In its most recent quarterly report filed Feb. 9, Integral stated the SEC’s inquiries, then informal, centered on Gary Prince, who is now the company’s executive vice president and managing director of operations. The SEC is looking into whether Prince acted as a “de facto executive officer” of Integral before his promotion in August 2006.
Wachtel had called attention to Prince as a controversial figure in her letter last year, noting he had pleaded guilty to financial fraud charges when another company employed him. The investigation is also looking into whether Prince acted as an accountant when employed by Integral, which he was barred from doing after his guilty plea, Integral’s quarterly report said.
In February, the company announced a number of steps to eliminate shareholder concerns. It appointed Mickey Harley, who owns Fursa Alternative Strategies LLC, its largest stockholder, to the board of directors. Integral also changed the board’s bylaws so that all members stand for election every year.
