Database provider InfoGROUP Inc. said Tuesday it has removed founder Vin Gupta as chairman, citing excessive corporate expenditures and expense reimbursements.
The changes are the result of an internal investigation, which came in response to an ongoing Securities and Exchange Commission investigation and a shareholder lawsuit. Gupta will continue to serve as chief executive officer of the company, which used to be named InfoUSA.
The company also said Gupta has "orally agreed" with the Board of Directors' Special Litigation Committee to pay InfoGROUP $9 million. According to a news release, the payment is subject to a settlement agreement and court approval, but it's not clear if it is referring to settlement of the shareholders lawsuit.
Calls to Gupta and company media representatives late Tuesday weren't immediately returned.
The Omaha company will also appoint a new chief financial officer, replacing Stormy Dean, who will be moved into a different position at InfoGROUP.
Bill Fairfield, chairman of DreamField Partners Inc. and the board's lead independent director, assumed the position of chairman last week, the company said.
The company plans to hire a new executive vice president to supervise legal compliance who will report directly to Fairfield.
The SEC is investigating spending by the database marketer, which already faces a lawsuit alleging the company misspent millions _ some of it on former President Bill Clinton and his wife, New York senator Hillary Clinton.
The SEC also requested documents related to certain trades of company stock.
Investment manager Cardinal Value Equity Partners and hedge fund Dolphin Limited Partnership filed the lawsuit last year. Neither Cardinal Managing Director Rob Kirkpatrick nor Arthur Crozier, who is listed as a contact on Dolphin's anti-InfoGROUP Web site, responded immediately to calls late Tuesday.
According to the lawsuit, InfoUSA has spent nearly $900,000 since 2001 flying the Clintons to domestic and international locations and political events.
Gupta has been a major donor to Democrats and gave at least $1 million to Bill Clinton's presidential library in Arkansas. Gupta also took part in a fundraiser for Hillary Clinton in Manhattan in June 2007.
The investment managers also say InfoUSA paid for use of a jet plane, the 80-foot yacht American Princess, condos in Hawaii and California and a University of Nebraska-Lincoln stadium box. In the past, Gupta and InfoUSA have said the jet, condos, stadium box and American Princess are for entertaining clients.
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On the Net:
InfoUSA Inc.: http://www.infousa.com
Dolphin's anti-InfoGROUP site: http://www.iusaccountability.com
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