Port Washington, N.Y. - Systemax has accepted the resignation of
Gilbert Fiorentino, who has agreed to repay the company $11 million in assets.
Fiorentino, formerly chief executive of the company's retail Technology
Products Group and a corporate director, had been placed on administrative
leave on April 18.
Following an independent investigation into his Miami, Fla., operations
based on an anonymous tipoff, and a May 3 meeting with the executive committee,
he has agreed to surrender about $11 million in assets within five business
days, including 1,130,001 shares of Systemax common stock and $480,000 in cash.
The agreement also requires Fiorentino to disclose his and his
immediate family's personal assets; forfeit undisclosed assets discovered by
the company; disclose information regarding certain matters that led to his
being notified of Systemax's intent to terminate him; and to fully cooperate
with the company in the future.
Fiorentino and Systemax also exchanged mutual general releases
and nondisparagement commitments, and Fiorentino agreed to a five-year non-compete
Systemax said the matters investigated occurred over a number of
years and were limited to the Miami operations, but did not specify Fiorentino's
improprieties. But The
quoted one former vendor, Prolynkz owner Sean Pate, who said
the division was run under a "pay for play" model in which manufacturers paid
for greater product exposure in stores and online. The newspaper also cited two
former employees who described a corporate culture of "fear and intimidation"
that led to a federal suit alleging violations of the Fair Labor Standards Act.
The suit was settled out of court.
The company has also been sued by Dell for trademark infringement
and by Florida's attorney general for failing to pay advertised rebates.
Systemax declined to comment about the Fiorentino's departure,
but said in a statement that its Technology Products Group businesses,
which include TigerDirect, founded by Fiorentino, and CompUSA and
CircuitCity.com, are continuing "normal operations" under founding Technology
Group CEO Robert Leeds. Leeds will act as interim chief executive while the IT/CE
manufacturer and retailer searches for a permanent replacement.
Added chairman/CEO Richard Leeds: "Our board of directors and
management team is focused on running and growing our business, which remains
very strong. The company has moved forward and I am very pleased that our
dedicated management team and employees are re-energized and looking forward to
a new era of profitable growth."
<strong>Updated!</strong> Port Washington, N.Y. - Systemax has accepted the resignation of Gilbert Fiorentino, who has agreed to repay the company $11 million.