Shopping.com Chairman Resigns Amid Probe
Shopping.com Chairman Bill Gross has resigned from the beleaguered Internet retail company a little over a year after arriving on the board of directors, according to Securities and Exchange Commission documents.
In a two-paragraph letter dated March 24, Gross tendered his resignation, effective immediately, saying that as chairman of Idealab, an Internet start-up incubator, he was committed to devoting time to early-stage companies and not serving as a director for public companies.
Gross’ resignation came as federal regulators halted trading in the company’s stock amid allegations of possible stock manipulation.
Both the SEC and the National Assn. of Securities Dealers are investigating.
Shopping.com claimed in SEC documents filed late Tuesday that Gross’ resignation was unrelated to the SEC probe.
Robert McNulty, Shopping.com’s founder, has replaced Gross as chairman. Meanwhile, Frank W. Denny, the founder of Group InterCom, a marketing company, and Ciboloa Group, a business consulting firm, was appointed a company director.
In another development, the company has filed suit alleging that its former chief financial officer breached his contract by refusing to sell his 140,000 Shopping.com shares back to the company when he departed.
The suit against Brian Leneck contends that the company could repurchase the shares for 1 cent each if he left the company. It asks for a judge to settle the dispute and set a share value for the stock.
Shopping.com’s legal action follows a March 17 suit by Leneck claiming that Shopping.com officials illegally took his shares. Leneck’s suit claims that the company’s tender offer was improper.
Leneck served as Shopping.com’s chief financial officer from December 1996 to July 1997, when he left for undisclosed reasons.
The Securities and Exchange Commission suspended trading in Shopping.com stock from March 24 to April 6. At the stock’s March 23 closing price of $22.25, the 140,000 shares are worth more than $3.1 million.
The brouhaha over Shopping.com’s stock erupted last month when short sellers alleged that Shopping.com’s market maker, Waldron & Co., was conducting a “short squeeze,” a price hike created by an artificial scarcity of a particular stock.
Shopping.com went public in November with a 1.3-million-share initial public offering priced at $9 a share. The stock peaked last month at just over $32 a share before retreating after the allegations surfaced.
Both McNulty and Irvine-based Waldron have denied any wrongdoing.