FalconStor Software CEO Jim McNiel resigns

Melville-based FalconStor's president and chief executive Jim McNiel Melville-based FalconStor's president and chief executive Jim McNiel has resigned, the company said Monday. (Nov. 8, 2011) Photo Credit: Steve Pfost

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FalconStor Software Inc., a Melville data-storage company that has struggled with waning sales and a falling stock price, said Monday its president and chief executive had resigned.

Jim McNiel, who has run FalconStor since 2011, voluntarily stepped down to pursue other opportunities, the company said. He also resigned from FalconStor's board of directors.

News of the shake-up at the troubled company sent its stock falling 12 percent Monday to $1.20. The stock has dropped 49 percent in 2013.

In a brief interview, McNiel declined to discuss his resignation, citing a confidentiality agreement. "I haven't made any public announcement about where I'm going," said McNiel, 50. "I have a lot of faith in this board and this company."

The company, founded in 1994, has been operating at a deficit for each of the past four years, losing $15 million in 2012 on revenue of $75.4 million. Sales have fallen in four of the last five quarters. FalconStor has blamed falling sales on sluggish economies in Asia and Europe, where many of its customers are based. The company has about 430 employees and offices in a dozen countries.

In November, FalconStor said it had hired Wells Fargo Securities to explore alternatives "to maximize stockholder value," raising the possibility that the company may be putting itself up for sale.

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McNiel joined FalconStor in 2009 and became CEO after the company's former chief executive, ReiJane Huai, killed himself at his home in Old Brookville in 2011 on the day before he was scheduled to plead guilty to federal bribery charges.

FalconStor has named Gary Quinn as interim chief executive to replace McNiel. Quinn joined FalconStor in 2012 and has been executive vice president and chief operating officer since April.

A FalconStor spokesman did not return calls for comment. In a statement, the company thanked McNiel for his service. "We wish him all the best for his continued success in his career," said Eli Oxenhorn, chairman of FalconStor's board.

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