As Finance Magnates reported at the beginning of the week, the founder and ex-CEO of Fastmatch, Dmitri Galinov, has filed a lawsuit against the company and its parent Euronext (read the full lawsuit here). In addition to claiming having been unfairly dismissed, he is elaborating on the key points which led to the filing of the case in New York.
We are delving deeper into the court filing in the following lines. As usual, it is important for our readers to remember that the details below are merely allegations and nothing is proven until the court makes its final ruling on the lawsuit.
According to the complaint, Galinov’s shares which Euronext has acquired from him earlier this week are to be valued at above $13 million if he was terminated without cause before May 2019. Instead, the company purchased his eight percent stake for about $1437.58 and asserted that he had been terminated for cause.
Changes after Acquisition
In the official complaint filed with the court in New York, Galinov asserts that Euronext never intended to keep him at the helm of the firm “indefinitely” as per the contractual agreement. The founder of Fastmatch claims that he has been a victim of a “Machiavellian scheme” to drive him out of the firm and prevent him from selling his stake at a decent price.
In the publicly available court documents, Galinov claims that the management of Fastmatch has changed dramatically after the acquisition. The board of directors of the company which consisted of him and four Euronext executives started convening too frequently and allegedly disrupted the operational flow at the firm.
Galinov states that Euronext has cut the legal team of Fastmatch and moved the firm’s general cousin to the parent company. He states that the company’s operations which included 30 people were disputed by the monthly board meetings and some emergency board meetings in between.
The lawsuit states that back in January this year, FastMatch began looking for a new software system. According to Galinov and the CTO of the company, Vladislav Rysin, two vendors agreed to provide the necessary system for a price between $2,000 and $5,000.
A high executive at Euronext N.V. suggested that the company awards the contract to KX Systems, for $200,000. Galinov claims that pressure was exerted on him to accept the deal. Another employee of the company assisted the high-ranking Euronext executive in skewing the decision in favor of the contractor mentioned above. As a result, as CEO of Fastmatch at the time, Galinov fired the employee.
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As he was suspecting conflict of interest for the high-ranking Euronext executive, Galinov reported the matter to the compliance department of Euronext in February. According to the response they received, the complaint was dismissed.
In the meantime, after the dismissal of the Fastmatch employee, KX Systems slashed its offer in half, cutting the price to $100,000.
Allegations of Inappropriate Euronext Exec Comments
According to the case, while having a conversation with Galinov, a senior executive at Euronext made inappropriate “sexually charged comments.” The happily-married founder of Fastmatch asserts that after the successful acquisition deal, the exec told him that, “Euronext wishes for Dmitri to make $55 million, enjoy work and have a good sex life.”
According to Galinov, a female executive told him that several women had said that the same Euronext executive made similar comments directed at them. After his complaint to the HR department of Euronext, he hasn’t received any communication in response.
“Harassment and Retaliation” Claims
While Euronext has been reporting a steady flow of volumes via Fastmatch in its quarterly results, the CEO of the company states that he was under attack by the board of the company. He got accused by the firm that he was recording board meetings. The letter Galinov received is described as “harassment and retaliation.”
The CEO voiced his dissatisfaction with the fact that he got awarded a minimum bonus for his performance during 2017, as the company registered significant year-on-year growth in its results. With an overall rating reviewing his performance at 1.47 out of 5, Galinov states that his review “didn’t not make sense.”
According to the court filing, “The review was a sham used by Fastmatch and Euronext in retaliation for his reporting of improper conduct by senior Euronext executives and Fastmatch board members.”
The case also adds that the review of his performance was performed by Lee Hodgkinson, a person who was not part of the direct management team of Galinov. On January 25, Euronext announced that he would be leaving the company in April. The lawsuit states that he didn’t have any experience in spot FX.
A Hot Industry Spat to Follow
There have been no new developments in this case since it was filed at the end of last week. We will keep our readers informed about the progress as the affidavits of the persons involved come in. There is a long list of legal spats in the industry, and all of the above are just allegations, the position of Euronext is still not publicly available, but the company shared with Finance Magnates at the beginning of the week that it is confident that the facts of law are on its side.