CoSine: E&Y Says Bye-Bye

There's more upheaval at CoSine Communications Inc. (Nasdaq: COSN): It was announced today that Ernst & Young will resign as the company's auditor after CoSine files its report for the quarter ending September 30, 2004.

Neither company explained why Ernst & Young took the decision to ditch CoSine. However, in a statement released earlier, CoSine said that it had not had any disagreements with the auditing firm in 2002, 2003, or 2004 that would have prompted Ernst & Young to comment in its reports.

CoSine's Audit Committee is now searching for a new auditing firm, it added.

Ernst & Young's move is the latest event in a turbulent few weeks for the company. Earlier this month CoSine announced it will lay off "most of its employees," keeping only a small crew on board to pursue "strategic alternatives," presumably a combination with some other company (see CoSine Cuts to the Bone and CoSine to Cut Nearly Everybody).

Following the news of CoSine's layoffs, Fujitsu Network Communications Inc. (FNC) announced that it would not be reselling any more CoSine gear (see FNC Drops CoSine Real FASST).Back in July, the company announced that it would be looking into alternatives such as a possible sale, having enlisted Broadview International as its financial advisor (see CoSine: The Big Sell-Off? and CoSine Losses Grow in Q2).

All this came after the company fought for months to prevent shareholders from liquidating the company and divvying up its assets (see CoSine Liquidation Threat Over and CoSine: Not Ready to Sell).

James Rogers, Site Editor, Next-gen Data Center Forum