Xoom shares sink after disclosing nearly $31M in fraudulent transfers, executive departure

StocksAssociated Press

Shares of Xoom sank in premarket trading Tuesday after the money transfer company said it was the victim of nearly $31 million in fraudulent transfers, and its chief financial officer had resigned after only about a month on the job.

Xoom said the fraud involved employee impersonation and requests that led to the transfer of $30.8 million in corporate cash to overseas accounts. The company expects to book that total as a one-time charge in its fourth quarter.

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The company said it believes no customer data was involved in the fraud, and the transfers did not involve customer money.

Xoom Corp. has contacted federal law enforcement officials and started an independent investigation with help from advisers outside the company.

Xoom also said Monday after the stock markets closed that Chief Financial Officer Matt Hibbard had resigned, effective immediately. The San Francisco company said Hibbard's resignation was not due to a disagreement or dispute with Xoom, but it did not elaborate.

Xoom announced in October that Hibbard would replace CFO and Chief Risk Officer Ryno Blignaut, who would leave Dec. 1 to spend more time with his family and pursue other interests.

Blignaut is returning temporarily to replace Hibbard, the company Monday.

Xoom will report its fourth-quarter and 2014 results on Feb. 10. It expects revenue to range between $43.1 million and $43.6 million in the quarter, which is up from its previous forecast for $41 million to $43 million.

Analysts expect $42.2 million according to the data firm FactSet.

Shares of Xoom dropped 6.2 percent, or $1.04, to $15.85 in premarket trading Tuesday shortly before the market opening. That comes after the shares tumbled 36 percent to close 2014 at $17.51.

The stock started trading after a February 2013 initial public offering and closed at $25.49 after its first day on the market.