Friedman’s Directors Resign After Just Two Days

Two directors of troubled US jewelry retailer Friedman's have resigned after just two days in their posts.

The company now has five directors out of a board of eight and the company said it is looking for additional directors "including directors necessary to satisfy New York Stock Exchange rules relating to the independence and experience of the members of the Audit Committee".

The directors are continuing a search for a permanent Chief Executive Officer and have initiated a search for a new Chief Financial Officer following the resignation of Richard Cartoon last Wednesday as chief financial officer after just five months in the post.

Friedman's is facing investigation resulting from a fraud lawsuit filed by Capital Factors Inc against a company that supplied jewelry to Friedman's and others.
 
The company is under investigation by the Justice Department and the Securities Exchange Commission and is in the process of restating its financial results for at least the last three years because of accounting for bad debts.
 
Only last month it received official notice that the SEC is considering civil action against the firm over accusations of securities law violations.