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Symantec Investor Call: Internal Investigation, Audit Committee Update

Symantec CEO Greg Clark
Symantec CEO Greg Clark

Symantec during an investor call today offered a statement about an internal investigation that spooked SYMC investors on May 11. The Symantec statement reads as follows:

"The Audit Committee of the Board of Directors has commenced an internal investigation in connection with concerns raised by a former employee regarding the Company’s public disclosures including commentary on historical financial results, its reporting of certain Non-GAAP measures including those that could impact executive compensation programs, certain forward-looking statements, stock trading plans and retaliation. The Audit Committee has retained independent counsel and other advisors to assist it in its investigation. The Company has voluntarily contacted the Securities and Exchange Commission to advise it that an internal investigation is underway, and the Audit Committee intends to provide additional information to the SEC as the investigation proceeds. The investigation is in its early stages and the Company cannot predict the duration or outcome of the investigation. The Company’s financial results and guidance may be subject to change based on the outcome of the Audit Committee investigation. It is unlikely that the investigation will be completed in time for the Company to file its annual report on Form 10-K for the fiscal year ended March 30, 2018 in a timely manner. At this time, the Company does not anticipate a material adverse impact on its historical financial statements."

What Triggered the Call

Today's call comes a few days after Symantec alarmed investors with a vague statement about the internal investigation. On May 10, the company said it was looking into claims from a former employee. The investigation could potentially impact the company's financial statements, the company suggested. Symantec shares on May 11 fell more than 30 percent on the news.

During today's follow-up call, CEO Greg Clark and CFO Nick Noviello shifted the conversation to Symantec's already announced financial results, and the company's fiscal outlook. I think Clark may have also mentioned that all executive bonuses are on hold until the outcome of the internal investigation, but I'm double-checking that.

When an analyst requested additional clarification about the investigation, Noviello declined and referred the analyst to the lengthy prepared comment above.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.