Looks like she messed with the bull... and got the horns!
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Karen Austin, general counsel of Lewisville's American Building Control Inc., found herself in a touchy situation last fall after she began to question whether the company's then-chief executive officer might have personally benefited from some corporate purchases -- allegations he denied.
Once she began to receive information, Austin says her ethical duty as a lawyer required her to investigate. But she says reporting provisions of the Sarbanes-Oxley Corporate Fraud and Accountability Act helped her obtain the authority to follow through on her concerns about some related-party transactions involving former CEO Niklaus F. Zenger. (Sarbanes-Oxley is a corporate compliance act passed by Congress in 2002 in the wake of financial scandals at major corporations.)
"We're not talking millions, but for our company, anything mattered," says Austin, who joined American Building Control as its general counsel in July 2001.
Austin says she went to the board of directors' audit committee and received authority to continue her research at American Building Control -- a security company founded in 1995 that formerly was known as Ultrak Inc. In December 2002, the company changed its name when it sold its closed circuit television business to Honeywell International Inc. for $36 million.
"I was in a very bad position. We are not a big company. This was my boss, our CEO," Austin says.
"It was very, very stressful," she says, adding that Sarbanes-Oxley would require her to first report any questionable dealings to the CEO.
Zenger, a Swiss national, resigned as CEO on Jan. 20, as chairman of the board on Feb. 5 and as a board member on March 8, according to the company's 10-k filed with the Securities and Exchange Commission on April 4. Zenger's resignation came after a group of shareholders in the company announced in an SEC filing in November 2002 that they no longer had confidence in him, or in the majority of the board members, and intended to seek their dismissals or resignations.
Zenger -- who became co-CEO of the company in April 2002 -- could not be reached for comment. He has no telephone listing in the Dallas area. An attorney in Bern, Switzerland, who Austin says has represented Zenger, Beat Marfurt, declines to answer questions about Zenger or even confirm he represents Zenger.
Information in that SEC filing, a Schedule 13D filed on Nov. 7, 2002, raised concerns for Austin, who has spent all of her career as an in-house lawyer at various companies.
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Austin says that around the time the 13D was filed, employees and others who knew Zenger began to come to her and raise questions about a large software purchase and the purchase of furniture for the company's office in Switzerland.
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Austin says the investigation was authorized after Zenger left by Bryan Tate, the current CEO and board chairman.
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Austin says she made a lot of telephone calls to Switzerland, but her fact-finding was slowed by the language barrier. Ultimately, Austin says, the company hired an investigator in Switzerland.
Austin alleges Zenger eventually told her she could no longer report to him and tried to discredit her before the board. She wasn't fearful of losing her job because she has an employment contract, but concedes it was a nerve-racking time.
During those weeks last fall, Austin says her duty was to the shareholders. The group of shareholders who filed the Schedule 13D were interested in removing Zenger and some of the board members, according to the filing.
"My wishes weren't necessarily the best thing for the company, which would be blow the thing wide open," she says.
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But Tate adds that his "experience with Miss Austin is positive."
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Karen Austin doesn't wait for anything to happen.
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Looks like she tried a coup, a power grab, for a bigger position and ended up getting fired. Poor Karen! :lol: :lol:
