(By Balaseshan) STEC Inc. (NASDAQ:STEC), a provider of enterprise-class Flash-based solid-state drives, said its chairman and chief executive Manouch Moshayedi resigned pending resolution of a civil complaint filed by the Securities and Exchange Commission against him.
Manouch will remain with the company, assuming the title of founder and continuing to serve as a member of the Board. In a regulatory filing, the company said the departing CEO's brother, Mark Moshayedi, was elected by the board to succeed as interim CEO.
Mark will also continue in his capacity as President and his current annual compensation will not change. Currently, he holds the position of the President, Chief Operating Officer and Chief Technical Officer and a member of the Board.
The Board also elected Kevin Daly, presently a lead independent director, to the position of interim Chairman of the Board. Daly will be compensated for his service as Chairman of the Board in accordance with the company's non-employee director compensation policies and practices.
These management changes are effective September 18, 2012 and the Board will decide the interim nature of the changes upon the resolution of the SEC Litigation.
On July 19, the SEC alleges that Manouch Moshayedi sought to take advantage of a dramatically upward trend in the stock price of STEC by deciding to sell a significant portion of his stock holdings as well as shares owned by his brother.
The SEC's complaint charges Manouch with violating the anti-fraud provisions of U.S. securities laws and seeks a final judgment ordering him to disgorge his own ill-gotten gains and the trading profits of his brother Mark, pay prejudgment interest and financial penalties, and be permanently barred from future violations and from serving as an officer and director of any registered public company.
STEC is trading up 0.92% at $7.14 on Tuesday. The stock has been trading between $6.53 and $11.98 for the past 52 weeks.