Former CEO of software startup Turvo, Eric Gilmore who was also a co-founder has been fired on the accusations of expensing $76,120 at strip clubs over a three-year span and was removed from the position by the company's board in May, according to legal filings. As per reports, Gilmore didn't deny the accusations yet has rather sued the company recently, claiming the board didn't follow the proper protocol for his termination. Yet Turvo Inc. counters it saying that it has followed procedures thoroughly by September.
The case illustrates the steps some boards are taking to quietly address allegations of misconduct before they become public. Many technology executives, such as Kris Duggan of Betterworks Systems Inc. and Andy Rubin of Essential Products Inc., and venture capitalists Justin Caldbeck and Shervin Pishevar were sacked after the #metoo movement. Yet they came to light only after they reached the media.
Turvo Inc. makes software to help companies track the movement of freight and is backed by about $85 million in venture capital. The 39-year-old accused is a veteran of Microsoft and Coupons.com, started Turvo in 2014. As per reports, Mubadala Investment Co., the Abu Dhabi-based sovereign wealth fund, led a $60 million investment in the company last year. It was after that when Gilmore hired a new chief financial officer, who discovered a pattern of unusual charges from the CEO in a review of corporate spending. The stripper-related expenses represented more than half of the $125,000 in entertainment charges initially flagged by the CFO.
Gilmore's actions reportedly led to a meeting in May. The board learned of the expenses, directors from Mubadala and venture capital firms Felicis Ventures and Activant Capital who told Gilmore he was out and also asked him to sign a separation agreement. Yet Gilmore defied them. He argued that the process violated company bylaws because the confrontation wasn't at first presented as a formal board meeting and didn't adhere to other rules. The former CEO has also filed a lawsuit which is yet to come to a verdict.
Despite being kicked out, Gilmore reportedly remains on the board and is the company's largest shareholder. Two other shareholders still hold executive positions and have clean records. Currently, Scott Lang is the new chief executive officer of Turvo Inc. who was a former executive in the energy industry. He joined Turvo just before Thanksgiving. In a media interview, Lang said he's focused on helping the company move past the scandal. He praised the 200-person team at Turvo for winning several big contracts recently and posting "massive" growth this year.