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June 04. 2014 8:21PM

Senate candidate Brown resigning post as adviser to startup

Republican Senate candidate Scott Brown announced Wednesday he is resigning his advisory position in startup defense technology firm and relinquishing all rights to company stock.

In doing so, Brown acknowledges his involvement in Global Digital Solutions Inc. and a reported $1.3 million in stock distribution had become a distraction to his campaign for the Republican nomination for the U.S. Senate seat from New Hampshire.

“It’s clear from recent media reports that my continued role with the company would be an unnecessary and unwanted distraction,” Brown said in a one-paragraph statement distributed Wednesday evening. “I want the people of New Hampshire to know they are my top priority.”

A New Hampshire Democratic Party spokesman said the company was headed by executives who had been sued for alleged securities fraud.

“The fact is, everything we know about GDSI was true when Brown joined its advisory board — and he joined anyway. New Hampshire voters deserve to know where else and from who else he was cashing in,” said Democratic spokesman Julie McClain. McClain said the Florida-based company went from being a beauty supply company, to a wireless data company to a gun manufacturer.

Brown described the company as a startup in the defense-technology field. He said it had potential for long-term growth. The firm reported having four employees, $272,000 in cash and $19.7 million in losses as of March 31, according to the Boston Globe.

In his statement, Brown said he was an adviser and did not participate in day-to-day decision making.

Brown had not received monetary compensation nor will he in the future, the statement reads. And said he will relinquish all his rights to restricted stock in the company.

Brown’s involvement with the company drew criticism from several newspaper editorial pages as well as one of his primary opponents, former U.S. Sen. Bob Smith, who on Monday noted that Brown has yet to file a financial disclosure form.

The form was due May 15, but Brown has received an extension to Aug. 9.

“Every public official and every candidate seeking elective office has a duty to make financial disclosures and be transparent in his business dealings,” Smith said in a statement.

mhayward@unionleader.com


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