NEWS26 January 2010

Sacked InfoGroup exec claims $1m in unpaid severance

Legal North America

US— Research and database marketing group InfoGroup is facing a lawsuit from sacked senior executive Stormy Dean, who claims he is owned more than $1m in unpaid severance and bonuses.

Dean was ousted from the company in October last year “without cause”, he says. InfoGroup did not reveal its reasons for the sacking, but it came soon after the company agreed a tentative settlement with the Securities and Exchange Commission (SEC) in connection with an investigation into the company’s spending and accounting practices.

The SEC investigation began in November 2007 in response to a shareholder lawsuit which alleged the company had misspent millions on corporate expenses and related-party transactions – chiefly payments made by InfoGroup to companies owned by its chairman and CEO at the time, Vin Gupta.

According to the Omaha World-Herald newspaper, which has obtained copies of court filings, Dean’s lawsuit acknowledges that while he was one of a number of executives within the company’s whose actions were reviewed by the SEC, he was never charged with wrongdoing.

Dean was, however, demoted from CFO to executive vice president and general manager of database group sales in the senior-level restructure that followed an internal probe into the allegations made in the shareholder lawsuit. The investigating committee found certain related party transactions, expense reimbursement and corporate expenditures to have been “excessive”. The company paid $9m to settle the shareholder lawsuit.

InfoGroup, the owner of Opinion Research Corporation (ORC), has yet to comment on Dean’s claim for unpaid severance and bonuses.

  • In other news today, ORC’s International arm has announced the opening of a new office in Scotland. The Edinburgh office is headed by Diarmid Hearns, a public sector policy expert who joins the firm from SQW and Fraser Associates. ORC International already counts NHS Scotland, the Scottish Government and the Scottish Environmental Protection Agency among its public sector clients.