Ex-AbacusNext CEO, CTO Sue Former Employer for Securities Fraud
The two former executives say AbacusNext misled them about its upcoming sale, lowering the price at which it bought back their stock. AbacusNext says it will file a motion to dismiss.
April 01, 2021 at 01:28 PM
3 minute read
AbacusNext's former CEO Alessandra Lezama and CTO Jerome Fodor have accused their former employer of securities fraud through buying back their held stock at an artificially lowered price ahead of its recent sale to private equity firm Thomas H. Lee Partners. The two filed a lawsuit in federal court March 8 against AbacusNext and its previous owners; AbacusNext will be filing a motion to dismiss the suit.
Lezama and Fodor worked at AbacusNext between 2013 and 2019. Through AbacusNext's 2015 sale to private equity firm PSG, in a separate sale five months later, and through company compensation packages, the lawsuit claims, Lezama and Fodor came to hold shares of the company worth $3.792 million between them at a purchase price of $100 per share, as well as more than 40,000 fully vested stock options. Lezama and Fodor were terminated from the company in April 2019 and May 2019, respectively.
A year later, the lawsuit alleges, AbacusNext made an offer to buy back Lezama and Fodor's shares: $125 per share for a total of $4.74 million, as well as $1,124,250 for the stock options. The suit says that on May 29, 2020, during discussions over the buy back, Fodor inquired about any offers to sell the company. A PSG principal allegedly told them, "We are not currently engaged in any formal discussions regarding the sale or similar transaction for a controlling interest in the Company at this time." In addition, the suit says the principal told Lezama "many of the options she held were 'practically out of the money,'" due to a strike price of $144, above the $125 value AbacusNext had given the stock.
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