FalconStor Software president, CEO and chairman of the board has resigned amid allegations of "improper" payments made in connection to one customer's contract.
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The departure of ReiJane Huai - who founded FalconStor a decade ago - had sent its share price tumbling more than 22% to $3.15 at time of writing.
In a statement, the data protection vendor confirmed "Mr Huai tendered his resignation following his disclosure that certain improper payments were allegedly made in connection with the company's contract with one customer."
It added: "The company has fully cooperated with law enforcement authorities with respect to the ongoing investigation, and it will continue to do so."
A special committee of the board has also been created by FalconStor to proceed with a "full internal investigation".
In the wake of Huai's resignation, FalconStor has appointed board member Eli Oxenhorn as non-exec chairman, CSO James McNiel has been named interim CEO and president and CFO James Weber as CFO and acting COO.
As with HP CEO, president and chairman Mark Hurd who departed the firm under a cloud last month, FalconStor must be realising the pitfalls of handing all those powerbases and responsibilities to one man, albeit someone that was a well-respected storage industry veteran.