FlexLM - FlexNet Licensing error:-1,359.

I installed FlexLM on W2008R2 and set up our licenses.
When my colleague performed a server status check he received the following error message:

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Status
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Flexible License Manager status on Wed 12/9/2015 14:13

[Detecting lmgrd processes...]
Error getting status: Cannot find license file.
The license files (or license server system network addresses) attempted are 
listed below.  Use LM_LICENSE_FILE to use a different license file,
or contact your software provider for a license file.
Filename:      C:\flexlm\license.dat
License path:  C:\flexlm\license.dat;
FlexNet Licensing error:-1,359.  System Error: 2 "No such file or directory"
For further information, refer to the FlexNet Licensing documentation,
available at "www.flexerasoftware.com".

When I did the same I just got the server status report as expected.

It turned out that my colleague's registry profile contained a key under

HKEY_CURRENT_USER\Software\FLEXlm License Manager

which pointed to "C:\flexlm\license.dat".

I did not have that key in HKEY_CURRENT_USER.

Deleting the  key in HKEY_CURRENT_USER solved the issue.

FlexLM - Version v11.12.1.4