A top executive and board member of Port Washington-based electronics retailer Systemax Inc. has been fired and must repay $11 million in cash and stock, the company said Monday.
The actions came after an investigation into the executive, Gilbert Fiorentino, following an anonymous whistleblower's tip. He headed Systemax sales operations in Miami, Fla., and its major subsidiaries TigerDirect.com, Circuit City and CompUSA.
The company has not specified any misconduct by Fiorentino, who had also been a member of the Systemax board of directors.
The investigation was conducted by a company audit committee with the help of independent counsel.
Systemax said in its Monday statement that Fiorentino, 51, has five days to give back to his former employer "1,130,001 shares of Systemax common stock owned or beneficially owned by Fiorentino and $480,000 in cash." These assets have a combined value of about $11 million, Systemax said.
Systemax said it did not expect the investigation into Fiorentino, or the resulting agreement, to require a restatement of past financial results. "The matters investigated occurred over a number of years [and] did not have a material impact on Systemax's previously reported financial results in any reporting period," the company said.
The division Fiorentino ran is now under the direction of a senior Systemax officer and continues to operate without interruption, the company said.
Fiorentino could not be reached for comment Monday.
"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 the company's intent to terminate him; and to fully cooperate with the company in the future."
On April 18, Systemax placed Fiorentino on administrative leave and named Robert Leeds as interim chief executive for technology products, while it searches for a permanent replacement. Fiorentino and the company also agreed to not disparage one another.
Systemax said "the financial statement benefit to the company from this agreement, which will be less than $11 million due to accounting requirements for equity transactions and the cost of the investigation, will be recorded during the second quarter."
Fiorentino had been placed on administrative leave in April, when the company publicly stated that it intended to fire him.
The Miami Herald last month reported on an insight into Systemax's internal investigation, based on a message sent to an investment counselor's clients. The newspaper quoted David Strasser, managing director at Janney Montgomery Scott, saying, "’Mr. Fiorentino placed his personal interest ahead of the company's interest, as we understand from our discussion with management.'"
Photo: Gilbert Fiorentino.