Online brokerage E*Trade Group revealed in its annual report filed with the Securities and Exchange Commission that a shareholder is suing its board of directors and chairman/CEO Christos Cotsakos, alleging a breach of fiduciary duties by the canceling of a $15 million loan to Cotsakos and then agreeing to pay him $15.2 million to settle tax liabilities.
Originally filed in December, the suit was amended in February to include abuse of controls and gross mismanagement, among other allegations. The lawsuit essentially argues that what started as a $15 million loan to Cotsakos eventually cost the company $30.2 million.
The suit alleges E*Trade Group settled the $15 million loan to Cotsakos “in exchange for his waiver of certain monetary and other rights under his employment agreement” and agreed to pay Cotsakos $15.2 million “to compensate him for tax liabilities resulting from the cancellation and settlement of the foregoing loan.”
