The head of Telit Communications, Oozi Cats, has resigned after an internal company investigation found he had concealed a US indictment against him.
Telit launched an inquiry when it was alleged Mr Cats was actually Uzi Katz, who is wanted for fraud in the US.
The internet company, which is listed on London's Aim market, said Mr Cats had "knowingly withheld" information.
It said his non-disclosure was a "source of considerable anger".
Mr Cats is one of the founders of the business which he has led since 2000. Telit is a supplier to Tesla, the electric car maker.
He took a leave of absence last Tuesday following a board meeting, and Telit has now confirmed he has stepped down and ended his employment with the company.
In a statement, the company said: "It is a source of considerable anger to the board that the historical indictment against Oozi Cats was never disclosed to them or previous members of the board and that they have only been made aware of its existence through third parties."
The US authorities have warrants against Uzi Katz, which date back to 1992, for allegedly setting up a fraudulent property scheme.
A spokesmen for Telit said: "This matter has been dealt with quickly and we are now driving the company forward."
Telit said it would recruit three new non-executive directors, one of whom would replace the current chairman, Enrico Testa.
Shares in Telit rose nearly 15% to 142p on Monday morning, but still remain well below the 182p level the shares were at before the allegations about Mr Cats emerged.
Mr Cats has not yet publicly commented on his resignation.
A spokesman for London Stock Exchange Group said it was unable to comment on individual Aim-listed companies.
Analysis: Dominic O'Connell, Today programme business presenter
These allegations are another blow to the credibility of Aim, London's junior stock market.
Aim - or the Alternative Investment Market, as it be used to called - is designed to give small companies which cannot afford the full costs of a market listing access to public funds.
It has spawned some huge successes - Asos, the fashion retailer, is an Aim stalwart that is now worth £4.5bn - but has also tested investors' patience.
Two years ago five Chinese companies had their shares suspended in quick succession in a spate of corporate governance scandals, including one memorable debacle when the London board had to confess it had been unable to make contact with the management in China.