InfoGroup’s board of directors has recommended removing chairman Vin Gupta from his role, after a five-month review by a special litigation committee. Gupta will remain CEO of the company, but has agreed to pay the company $9 million, subject to court approval.
The committee found that “various related party transactions, expense reimbursements, and corporate expenditures were excessive,” according to an InfoGroup statement.
Bill Fairfield, a member of the internal investigative committee, assumed the role of chairman last week, according to the company.
In connection with its findings, the special litigation committee has asked directors George Haddix, Elliot Kaplan and Vasant Raval to resign from the board.
CFO Stormy Dean will assume a new position in the company in corporate strategy and planning. He will remain in his current position until a new CFO is named.
InfoGroup also announced the creation of an EVP for business conduct and general counsel, who will be responsible for supervising all internal legal and compliance functions. The new employee will report directly to the chairman of the board.
An InfoGroup spokesman said the company would not comment further than what has already been publicly released in a statement filed with the US Securities and Exchange Commission.
In a prepared statement, Gupta said he endorsed all the recommended changes made by the committee.
“I believe this resolution will allow the company to move forward and continue to focus on providing our clients with industry-leading marketing solutions,” he said.
Fairfield, in a statement, said the decisions made by the committee “address the internal deficiencies identified during the review and create a different governance process and structure that will enable the company to build on our past successes.”
The internal committee was formed in response to an ongoing Securities and Exchange Commission investigation and a shareholder lawsuit. The lawsuit alleges that the company misspent millions of dollars, including some on personal expenditures for Bill and Hillary Clinton. Gupta has been a major donor to the Clintons and the Democratic party.
