Dmitri Galinov, founder and former CEO of FastMatch, has announced that he has filed a lawsuit in the US District Court for the Southern District of New York against FastMatch and Euronext US for the unlawful termination of his employment.
Galinov left Fastmatch just over one year after Euronext acquired a 90% stake in the company, his departure was seen by many at the time as surprising.
The lawsuit asserts that Galinov was fired in June 2018 “improperly, unceremoniously, and under false pretense” as part of “a Machiavellian scheme” intended to ensure Euronext could profit from his removal by denying the payment of millions of dollars due to him.
The lawsuit also asserts that Galinov’s firing formed a retaliation for his reporting to Euronext management incidents of “significant misconduct” by senior Euronext executives.
In a release, Galinov says that Euronext kept him on board as CEO for FastMatch, which proved to be “a highly successful acquisition for Euronext”. In fact, the release continues, for the duration of his Euronext employment, FastMatch, under Galinov’s direction, delivered quarterly revenue results that met or exceeded Euronext’s projected targets, and reached a record high trading activity in Q2 2018.
The complaint states that Galinov’s firing was “demonstrably retaliatory and based on false rationale” as it occurred after he had exposed several instances of serious misconduct and experienced significant harassment, the suit alleges.
The suit further alleges that Euronext and/or FastMatch breached the Employment Agreement by improperly and without justification terminating Galinov purportedly “for cause” by relying on conduct that did not constitute cause, and by failing to afford Galinov an opportunity to cure (take remedial action), among other reasons. ?
It adds that because of the alleged scheme to drive Galinov out of the company, he has been denied compensation and benefits and the right to continued employment as CEO of FastMatch including payment for the full value of his stock. As a result of allegedly terminating Galinov under a false claim of “just cause,” the release says that Euronext intends to purchase all of Galinov’s 1,437,575 shares at the price governed by the “Termination for Cause” provision in the Stockholders’ Agreement.
Using this provision, the complaint claims that Euronext would be purchasing Galinov’s shares for $1,437.58 (or $.001 per share) rather than $13,028,525.90 (or $9.06284951 per share) that Galinov is due for “Termination without Cause.” ?
In a release of its own, Euronext has confirmed that it has increased its stake in Fastmatch to 97.3%. The company says, “The additional interest was acquired by purchasing the remaining shares owned by Dmitri Galinov, co- founding CEO of FastMatch, for $.001 per share, following his termination for cause by FastMatch. The shares were purchased pursuant to the agreement signed at the time of the acquisition of the Company.”
Galinov’s lawsuit further claims that in 2018, he reported “suspected serious financial and ethical misconduct” by senior Euronext executives. The first allegedly related to a major software purchase and Gailnov contends that a Euronext executive pressured him to purchase software that was nearly 10 times more expensive than what was needed. Suspecting the Euronext executive may have a personal interest in the transaction, the release says that Galinov reported it to the compliance department at Euronext in January, which purportedly investigated the matter but dismissed the claims as unfounded, the suit claims.
In February, Galinov reportedly asserted complaints about highly offensive, sexually charged comments by a senior Euronext executive and reported the incident to the human resources department at Euronext, which he claims never followed up with him as to whether an investigation was conducted or any action taken to address the misconduct.
“In the end,” the release says, “Mr Galinov’s ‘reward’ for exposing such misconduct ‘was fatal’. Following his reporting of this potential misconduct, Euronext began taking retaliatory action against Mr. Galinov such as providing him with a negative annual review which contained false criticisms and performance ratings that did not accurately reflect Mr Galinov’s performance.”
In the release, Galinov says he is seeking damages for his claims that will be determined at trial, including the retrieval of costs and disbursements associated with the pursuit of the lawsuit.
A spokesperson for Euronext says in a statement to Profit & Loss, “The Company has not directly been made aware of the mentioned US lawsuit in NY and cannot make any comment without knowing its alleged content. All employees of the Euronext family, including senior management, are expected to adhere to a high standard of professional conduct, consistent with the Company’s code of ethics. We are confident the facts and the law are on our side.”