ModusLink Crashes 30% on CEO Resignation, Restatement of Financial Results

Shares of ModusLink

are seeing much weakness during Monday's trading session after the company's CEO announced his resignation upon news of five years of company financial restatements. ModusLink Global Solutions today announced the retirement of Joseph C. Lawler from his role as President and Chief Executive Officer of the Company, effective immediately upon the appointment of a new chief executive officer. Mr. Lawler is stepping down from the Board of Directors, effective immediately. The Company also announced the departure of William R. McLennan, president, global operations for ModusLink, effective immediately. As a result of the accounting evaluation conducted to date, the Audit Committee has assessed the impact of errors in the Company's financial statements from fiscal years 2009 through 2011, as well as the first two quarters of fiscal 2012 and its unaudited selected financial data for fiscal years 2007 and 2008 and, on June 9, 2012, concluded that those previously issued financial statements should no longer be relied upon. Management is continuing to assess the Company's internal control over financial reporting and its disclosure controls and procedures, and expects to conclude that the Company has a material weakness in its internal control over financial reporting. Management will report its conclusion on internal control over financial reporting and disclosure controls and procedures upon completion of the restatement process. Currently, shares of ModusLink are trading down about 30% at $2.95 per share.