By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Miami – TigerDirect founder and former Systemax retail chief Gilbert Fiorentino will pay a $65,000 penalty and will never again serve as an officer of a public company to settle charges by the Securities & Exchange Commission (SEC) of kickbacks and theft.
The SEC’s complaint, filed in a federal court here, accuses the one-time head of CompUSA and CircuitCity.com with demanding and receiving more than $400,000 in paybacks from Systemax suppliers and stealing several hundred thousand dollars more in company merchandise over a five-year period.
“Fiorentino brazenly stole from Systemax and betrayed the trust of its shareholders,” said Eric Bustillo, director of the SEC’s Miami regional office. “His actions demonstrate that he is unfit to serve as an officer or director of a public company.”
The SEC alleges that Fiorentino demanded and received payments from outside service providers, manufacturer representatives, and others that conducted business with Systemax. The agency cited one example in which a company that supplied materials to Systemax’s subsidiaries for use in retail and mail order operations was compelled to pay him $5,000 to $10,000 a month.
The SEC also alleges that Fiorentino used his executive position to routinely misappropriate merchandise that was used to market Systemax’s CE and IT products through its mail order catalogs and e-commerce sites.
He was also charged with failing to disclose his extra compensation and perks to Systemax or its auditors, so that the amounts were under-reported to shareholders.
The SEC said the misconduct occurred from January 2006 to December 2010.
As part of the settlement, Fiorentino has agreed to pay a $65,000 penalty on top of the $9.1 million in stock and stock options and $480,000 in 2010 bonus pay that he surrendered to Systemax after resigning last year.
In addition, he has consented to a
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