Xoom Says Criminal Fraud Costs $30.8 Million, CFO DepartsSonali Basak
Xoom Corp., the provider of Internet money-transfer services, announced $30.8 million in fourth-quarter costs tied to a suspected criminal fraud and said its chief financial officer resigned.
“The incident involved employee impersonation and fraudulent requests targeting the company’s finance department, resulting in the transfer of $30.8 million in corporate cash to overseas accounts,” San Francisco-based Xoom said in a regulatory filing yesterday after U.S. markets closed.
Xoom contacted federal law-enforcement authorities who are pursuing a criminal investigation, according to the filing. The company said it doesn’t believe that customer data or money were involved in the fraud.
Former CFO Ryno Blignaut will fill that role on an acting basis after the departure of Matt Hibbard, Xoom said in the filing. The company said Hibbard’s exit wasn’t the result of a disagreement with the company.
“While the company has internal controls in place and has implemented additional internal procedures, its audit committee and advisers are reviewing these controls and processes as part of the investigation” into the fraud, according to the filing. “While this matter will result in some additional near-term expenses, the company does not expect this incident to otherwise have a material impact on its business.”
Xoom fell 7 cents to $16.82 at 11:21 a.m. in New York, after dropping as low as $15.66 earlier in the day. The company said fourth-quarter revenue was probably $43.1 million to $43.6 million, compared with its previous forecast of $41 million to $43 million. Xoom plans to report complete results for the period on Feb. 10.