Inside Vista Equity after CEO Robert Smith's fraud settlement

Vista Equity continues to work toward getting its house in order, following last Thursday's stunning admissions of personal tax fraud by founder and CEO Robert Smith.

Why it matters: Smith has settled with the Justice Department and the IRS, but the story isn't over yet.

Three updates:

1. There has not yet been any resolution to the conflict between Smith and firm president Brian Sheth.
2. Vista recently removed Sheth from the board of Datto, a data protection software company that last night raised nearly $600 million in its IPO (at an initial market cap of $4.25 billion). Multiple sources say Sheth is credited with selling the original buyout to Datto founder and former CEO Austin McChord, after the pair connected at a Morgan Stanley tech event. He had been listed on Datto's original IPO paperwork, filed on Sept. 29.
3. Vista isn't sitting on its hands while all of this plays out. Axios has learned that the firm quietly agreed to buy a 50% stake in SmartBear, a Somerville, Mass.-based software development and testing company, for around $1.7 billion from Francisco Partners (which retains the other half).

The bottom line: The tension isn't just between two top execs at one of private equity's largest firms. It's also between the appearance of stability and the reality of volatility.