According to a filing with the Securities and Exchange Commission, Stonegate said it notified the NYSE that the majority of its board of directors are no longer independent, after Richard Kraemer, Stonegate’s chairman of the board, was named interim CEO after Cutillo’s departure.
With Kraemer becoming interim CEO on Sept. 15, Stonegate is now in violation of the requirements of Section 303A.01 of the NYSE Listed Company Manual.
Section 303A.01 requires that listed companies must have a majority of independent directors, each of whom satisfies the independence requirements set forth in Section 303A.02.
And if Stonegate remains in violation of those rules, Stonegate would be facing delisting from the NYSE, due to a failure to satisfy a continued listing rule or standard.
“We are working diligently to rectify this deficiency and expect to be in full compliance with Section 303A.01 as soon as reasonably practicable,” Stonegate Chief Financial Officer Robert Eastep said in the SEC filing.
Cutillo founded the company, which is based in Indianapolis, back in 2005.
"I am proud of the growth and development of Stonegate Mortgage since the company was founded ten years ago. We have a great team in place that has accomplished so much during a time of transformation in the mortgage industry,” Cutillo said upon his departure from the company, which was announced late last month.
“The strategic investments we have made in technology have positioned the company for growth and success so now is the right time for me to leave Stonegate,” Cutillo continued. “I am looking forward to working with Rich, Jim and others to transition the day-to-day leadership of the company and will be redirecting my entrepreneurial energy on a new endeavor going forward.”