On April 30, 2026, the Securities and Exchange Commission approved the plan of distribution for the Synchronoss Technologies, Inc. Fair Fund under Release No. 34-105344, directing Epiq Class Action and Claims Solutions, Inc. as Fund Administrator to distribute $12,720,000 collected in civil money penalties to investors who suffered losses on Synchronoss shares during the period of the company’s accounting misconduct. The penalties were imposed through six settled administrative orders issued on June 7, 2022, against Synchronoss and five individuals: Clayton “Charlie” Thomas, Marc Bandini, Daniel Ives, John Murdock, and Ronald Prague, Esq. Synchronoss paid $12,500,000. The five individuals paid a combined $220,000. The plan distributes the net available fund to harmed investors and was approved without modification after the Commission rejected all objections raised by Chicago Clearing Corporation, a professional third-party filer that sought to relax documentation requirements, permit claim assignments, and allow its fees to be deducted directly from investor distributions.
A Telecom Software Company That Hid Side Letters From Its Auditors and Booked $190M in Revenue It Had Not Earned
Synchronoss Technologies, headquartered in Bridgewater, New Jersey, provided products, software, and services primarily to telecommunications companies including AT&T and Verizon. From at least 2013 through 2017, the company engaged in a pattern of improper revenue recognition that the SEC’s 2022 orders found violated the antifraud provisions of the Exchange Act and multiple accounting control and reporting requirements.
The misconduct took three forms. First, Synchronoss recognized revenue on transactions for which there was no persuasive evidence of a binding arrangement. Second, in certain acquisitions and divestitures, the company recognized revenue on license agreements rather than netting those amounts against the purchase prices involved. Third, in licensing and hosting transactions, Synchronoss recognized revenue upfront in full rather than ratably over the term of multi-year arrangements. This third category was facilitated by side letter agreements — secret written arrangements between Synchronoss employees and counterparties that modified signed contracts in ways that made upfront revenue recognition improper, while keeping those modifications hidden from auditor Ernst and Young. In July 2018, Synchronoss announced a restatement of its 2013, 2014, 2015, and 2016 financial statements totaling approximately $190M in cumulative revenues.
Five Individuals Settled for Roles Ranging From Side Letter Execution to Auditor Deception
The June 2022 orders settled charges against five Synchronoss employees in addition to the company itself. Thomas, Bandini, Ives, and Murdock settled charges arising from their participation in at least one side letter agreement that concealed the contingent nature of revenue Synchronoss had recognized upfront. Thomas paid $90,000, the largest individual penalty. Bandini paid $75,000. Ives, who served as Executive Vice President of Investor Relations from approximately February 2016 to mid-2017, paid $15,000. Murdock, who was still employed at Synchronoss at the time of the 2022 charges, paid $15,000.
Prague, who served as Synchronoss’s general counsel during the relevant period, settled separate charges tied to his role in misleading the company’s auditors about two specific transactions. He paid a $25,000 civil penalty and was suspended from appearing and practicing before the SEC as an attorney for 18 months. According to the SEC’s original press release on the charges, the Commission also brought a separate federal court complaint against former CFO Karen Rosenberger and former Controller Joanna Lanni for more serious alleged fraud-related conduct — those parties were not included in the administrative settlements that form this Fair Fund.
Chicago Clearing Objected to Three Provisions of the Distribution Plan and Was Rejected on All Three
The distribution process generated a formal objection from Chicago Clearing Corporation, a professional third-party filer that assists institutions in submitting claims to SEC distribution funds. Chicago Clearing raised three objections: that documentation requirements were excessive and should be replaced with random audits; that harmed investors should be permitted to assign their claims to third-party filers for value; and that third-party filers should be allowed to deduct their fees directly from distribution payments before those payments reach investors.
The Commission rejected all three. On documentation, the SEC stated complete documentation is required to preserve the integrity of the distribution process. On claim assignment, the Commission concluded distribution payments should go directly to harmed investors, not to parties who purchase claims at a discount. On fee deduction, the Commission cited Section 21(d)(4) of the Exchange Act, noting Congress specifically intended to prevent practices common in private securities litigation, such as compensating attorneys from investors’ compensation funds, from being carried over to SEC distribution programs. The Commission noted this was the seventh time it had rejected similar objections from Chicago Clearing in recent distribution proceedings.
Conclusion
The Synchronoss Technologies Fair Fund represents the end of a distribution process arising from one of the more methodical accounting fraud cases of the past decade: a company that ran side letters for four years to hide the contingent nature of revenue it was booking as earned, required a $190M restatement to correct, and cost five individual employees their reputations and their professional standing with the SEC. The $12.72M available for distribution is the civil penalty portion of the resolution. Synchronoss’s former CEO, Stephen G. Waldis, was separately required to reimburse the company $1.3M in compensation he received during the restatement period, a clawback that ran outside the Fair Fund. Epiq will now begin distributing the fund to shareholders who held Synchronoss stock during the period of the fraud.
