Edgewater Investor Files SEC Complaint

An unhappy investor of Edgewater Technology Inc., where seven workers were killed the day after Christmas, complained to U.S. regulators Thursday that the Web consulting firm is holding too much cash and should distribute more to shareholders.

Robert Chapman Jr., whose El Segundo-based investment fund owns 5.2% of Edgewater’s stock, has told Edgewater Chairman Clete Brewer he does not support the company’s plan to retain a large chunk of cash and equivalents to fund its core Web consulting business, according to a Securities and Exchange Commission filing.

Shares of Edgewater (EDGW) closed at $6.56 Thursday, up 9 cents on Nasdaq.

Last week, Edgewater announced it will use $130 million of its cash to pay $8 a share for about 57% of the company’s outstanding common stock.

But Chapman said the firm should return even more of its estimated $145 million in cash to shareholders. Chapman also said he is “disenchanted” with Edgewater’s employee stock option program, saying it is “highly dilutive” to shareholders, according to the SEC filing.

Edgewater officials did not return telephone calls seeking comment.

Edgewater software tester Michael McDermott, 42, was charged Wednesday with methodically killing four women and three men at the company’s Massachusetts office on Tuesday, shooting each person several times with an assault rifle and shotgun. He is being held without bail.

Chapman, in his filing, told the SEC he has set up a fund for the families of the seven Edgewater workers who were gunned down.

The company separately announced its own fund.