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 clause.
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
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."