I am a Board member of a Company incorporated in Nevada but doing business in China. Several Board members, including the CEO and legal counsel are under investigation by the FBI for wire fraud and accepting kickbacks. They have resigned.There is an Acting Chairman since November, 2011. I am another Board member as of Feb 2012. The Company has been ravaged financially, and now the Chairmand is taking a large corporate opportunity and establishing another private corporation to take this opportunity with no regard for the current stockholders. He has also appointed Board members who are supporting him in this effort and began to discuss bankrupting the current company in yesterday's Board meeting, which I stopped. Is this illegal? How do we stop him before it is too late? I believe this is a Breach of Loyalty to the current stockholders, but don't know if it is illegal.
Country relating to Question: United States
Contacting the SEC--they agree with the Breach of Loyalty idea. However, this would come under Nevada law. Company is also listed on FINRA but stock is below 1 cent.
I have also documented all erroneous actions at this point.
Thank you for using Just Answer. If you require clarification, please feel free to post a follow up question.Yes, it sounds like it could be a breach of loyalty and it must be disclosed to the board and declined by the company before the Chairman can divert it. The other problem, is your exposure to liability if you acquiesce without objection on record.If you have corporate general counsel, you may want to send a memo and copy the other board members.
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