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Item 5.02 Departure of
Directors or Certain Officers; Election of Directors; Appointment
of Certain Officers; Compensatory Arrangements of Certain
Officers.
On
October 2, 2019, John Busshaus, Chief Financial Officer of
Liberated Syndication Inc, a Nevada corporation (“Liberated
Syndication” or the “Company”) resigned from such
position with the Company, effective upon the entry of the order
described below and related court approval. The Board of Directors
of the Company accepted Mr. Busshaus’ resignation letter and
appointed Mr. Gabriel Mosey as interim Chief Financial Officer, in
each case effective upon such order having been entered. Pending
such effective date, the Company has eliminated Mr. Busshaus'
responsibility for financial reporting and related functions and
responsibilities that he performed as CFO. In his capacity as
interim Chief Financial Officer, Mr. Mosey will succeed Mr.
Busshaus as the principal financial officer and principal
accounting officer of the Company. The Company has initiated a search
for a permanent Chief Financial Officer. This transition did not
arise from any issues involving Liberated Syndication’s
financial results, business practices, internal controls or
financial reporting procedures.
Mr. Mosey, age 35, has served as the Company’s Controller
since May 2018 and was previously an auditor at PPG Industries,
Inc. and Ernst & Young. Mr. Mosey earned his Bachelor of
Accounting degree from Utah Valley University and a Master of
Accounting degree from Duquesne University.
Item 7.01 Regulation FD
Disclosure.
On
September 30, 2019, the Securities and Exchange Commission
(“SEC”) filed a complaint in the Southern District of
New York regarding certain actions by Christopher Spencer and John
Busshaus involving the Company’s previous parent company, FAB
Universal Corp. (“FAB”). The Company understands that
the SEC is in the process of filing settled charges arising out of
the complaint for court approval and expects that public notice
regarding such settlement will appear shortly on the SEC’s
website.
According
to the SEC’s complaint, between 2012 and 2013, Mr. Spencer
and Mr. Busshaus the former Chief Executive Officer and former
Chief Financial Officer of FAB, respectively, negligently used a
series of misrepresentations about the capabilities and growth
prospects of a central component of FAB’s business in China,
namely FAB’s multi-media kiosk business. At the time, Mr.
Spencer and Mr. Busshaus believed they were acting properly in
receiving and reviewing information provided by FAB’s
accounting and financial personnel located in China and relying
upon this information prior to making these representations, and
have accepted the SEC’s offer of settlement without admitting
or denying the allegations or findings contained in the complaint.
The settlement is not expected to prevent Mr. Spencer or Mr.
Busshaus from serving as an officer or director of a public
company, although Mr. Busshaus, who holds an inactive CPA license,
has agreed to a suspension from appearing or practicing as an
accountant before the SEC, for which he can apply for reinstatement
in two years. The order
suspending Mr. Busshaus from appearing or practicing as an
accountant before the SEC is expected to be entered after the court
enters judgment in this matter.
The
information included in this Item 7.01 shall not be deemed
“filed” for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference into any
filing made by the Company under the Exchange Act or Securities Act
of 1933, as amended, except as shall be expressly set forth by
specific reference in such a filing.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
