Back during the hot days of August, we brought to your attention a new court case related to the industry. The founder and former CEO of Fastmatch, Dmitri Galinov has resorted to legal options to defend his equity stake in the company. The parent of the company Euronext however, has a diametrically opposing view.
At the time, Euronext had little to say on the matter. The company currently owns 97.3 percent of Fastmatch shares after purchasing the CEO's stake for a little over $1,000. Several weeks later the firm has filed its official response to the allegations made by Galinov.
According to the court documents, Euronext and Fastmatch view the former CEO’s case as “meritless and fabricated.”
Commenting to Finance Magnates in a statement, a spokesperson for Fastmatch said: “Last week’s court filing details the reasons Dmitri Galinov was terminated for cause, including disregard for his fiduciary duty and other violations of his employment agreement.”
“Euronext and FastMatch hold themselves to the highest ethical standards of trust and integrity, and we are confident that we have the facts and the law on our side. We have a great team and an innovative platform with FastMatch: we’re focused on growing the business and the opportunities ahead,” the spokesperson elaborated.
In a statement, a spokesperson for Dmitri Galinov said: “The assertions made in the answer by Euronext U.S., Inc. and FastMatch, Inc. are baseless, and unsupported by facts."
"Dmitri Galinov looks forward to having his wrongful termination lawsuit – and its allegation that his firing by Euronext U.S., Inc. was ‘demonstrably retaliatory and based on false rationale’ -- heard in U.S. District Court,” the statement concluded.
A Different Viewpoint
As is customary with court cases, the views of the parties on a subject matter are materially different. In the case of Galinov vs Euronext and Fastmatch, this is no different and the following lines show a glimpse of how the companies are responding to the allegations of the former CEO.
Euronext and Fastmatch stated that the allegations on part of Galinov are “fiction.” The companies state that the plaintiff’s case is a result of his dissatisfaction with the tax rates he had to pay on the deal.
According to the official response to the allegations by the defendants, Galinov has refused to execute on his responsibilities as CEO. Demanding a reimbursement from the firm, the document states that the founder of Fastmatch wanted to get reimbursed for his additional tax expenses.
According to Euronext and Fastmatch, Galinov was advocating that the external accountants of the company manipulate the valuation of Fastmatch in order to decrease his tax exposure.
Counter-Allegations
In the affidavit which is included in the document filed by the legal representatives from Euronext and Fastmatch, Galinov is portrayed as CEO who declined to execute his duties. The document states that he refused to participate in a board meeting as he put a condition to revise the stockholder agreement after the deal closed.
The company is alleging that Galinov systemically didn’t attend meetings with Euronext execs ‘if he did not like the people attending.’
In response to Galinov’s allegations that the company was going to overpay for a software product, the defendants state that the CEO sent an email to two members of Euronext N.V.’s Compliance team. In it, he alleged that two individuals made a deal with the vendor to receive kickbacks for themselves.
The investigation concludes with a statement that Galinov's claims were “fabricated.”
Bonus Compensation, Volumes, and Revenues
Euronext and Fastmatch claim that days after filing the complaint with compliance, Galinov offered to drop it in return for a significant bonus compensation increase. The company states that it denied "Galinov’s obvious attempt for a 'shake-down'." He allegedly made the same offer related to the sexual harassment accusations described in the initial court filing.
The company proceeds to underline that Galinov has been recording board meeting which “inexplicably exempted his own business phone line”. The CEO of the company never communicated to other board members about the recordings.
Last but not least, the company states that the former CEO of the company was after increasing his potential financial gains by meeting an earn-out target. While at it, he was not acting in the best interest of shareholders, the response from Fastmatch and Euronext states.
On the contrary, the document asserts that Galinov’s move to reduce Fastmatch’s pricing contrary to the board’s recommendations yielded higher volumes which did not translate into higher revenues.
We are attaching the full court documents detailing the accusations and Fastmatch and Euronext’s response. Until the court case concludes, we are not taking any sides in this conflict where the parties have diametrically opposing views.
