yes. My take is that the former CFO was innept and never very "engaged" with the company. He would primarilly be responsible for the issue at hand.
However John signed off on that. He may get stung. It's a mistake of a rookie CEO to hire bad staff because they believe in them or cannot afford better thinking it will be good enough. John has learned from it and - hopefully can move this forward.
Of course, if there were any records of John wishing the CFO to pump up the equity it is a different outcome - or at least a fiercer battle.