Data backup and recovery provider FalconStor had a bit of a shake-up today, as CEO, chairman and president ReiJane Huai abruptly resigned from the software firm. The reason for Huai’s resignation is related to improper payments, with the company’s released statement also mentioning an investigation:

“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.

“The Company has fully cooperated with law enforcement authorities with respect to the ongoing investigation, and it will continue to do so. In addition, a special committee of the Board has been formed to conduct a full internal investigation of these matters and the special committee has retained counsel to assist it in its investigation.”

The scandal itself is unfortunate, especially as FalconStor shares went down after Huai’s resignation took place. The company’s shares took an early dip from $4opening to $2.60, bouncing back to over $3.20 by the middle of the trading day.

However, FalconStor has no intention of letting this setback affect ongoing business. The company’s Board of Directors has named Eli Oxenhorn, current Board member, as non-executive chairman. James McNiel, FalconStor’s chief strategy officer, is now the company’s interim CEO and interim president. James Weber is now FalconStor’s interim COO, while also keeping his position as CFO.

James McNiel is a strong choice for interim CEO and interim president, and his new leadership position will give him an opportunity to focus on the vision he shared with us during an interview at #theCUBE. An earlier interview with McNiel can be found here as well.