Ubiquiti Networks, Inc. (UBNT) Accused of Abysmal Corporate Governance Structure

According to the complaint against the company's officers and directors for breaches of fiduciary duties, unjust enrichment, and waste, Ubiquiti Networks, Inc. (UBNT) failed to maintain internal controls when it shipped its products to Iran despite a United States ban on such sales, which ultimately resulted in a violation fine. Moreover, the Board failed to take responsibility to fix Ubiquiti’s poor corporate governance. The continued lack of sufficient controls became glaringly obvious when Ubiquiti failed to realize that it had been defrauded of $46.7 million, or 10% of its cash position, until the FBI notified the company of the fraudulent transfers. These and other issues led the U.S. Securities and Exchange Commission to subpoena documents from the company and certain officers in February 2019. Upon this news, the company's stock declined significantly, triggering a federal securities fraud class action that can cost Ubiquiti millions to defend, not to mention the millions in damages that the company could owe to shareholders if found liable for the alleged wrongdoing.

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