SFX Entertainment Being Sued for Alleged Stock Fraud, Breach of Contract Claims

Image via SFX Entertainment on Facebook
Image via SFX Entertainment on Facebook

With so much money being exchanged during SFX Entertainment‘s push to control EDM EMC, I guess one could figure that it wouldn’t take long for the powerhouse to get sued. This is a wild situation, where three “music industry veterans” (Paolo Moreno, Gabriel Moreno, and Lawrence Vavra) are essentially claiming that, in the beginning, the idea of SFX’s global stronghold on EDM was a collective one, with SFX’s Robert Sillerman being more of a “strategic partner” in the situation. They claim that “after doing all the leg work to create the company, we brought on Sillerman as a strategic partner… Once on board, he squeezed us out of SFX, using our business strategy for his financial benefit and defrauded us out of millions.”

Apparently they have emails that say Sillerman promised them “a joint partnership in which the plaintiffs would receive 2.5 million “founders shares” of SFX,” but then never gave them the monies, even though they stayed on with SFX putting in work.

As of right now, a representative at SFX says they “will vigorously defend this baseless lawsuit,” so we’re sure we’ve not heard the end of this. And while it might not topple what SFX has in the pipeline, it’ll be interesting to see how their stock fairs with this news.

EVERY COMPANY SFX ENTERTAINMENT HAS ACQUIRED (SO FAR)

(inthemix via Wall Street Journal)

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  • http://soundcloud.com/the-colonel-mc The Colonel

    It’s what’s known as a strike suit–as with the Vinklevosses and Facebook, anytime a company gets successful you’ll have people coming out of the woodwork to claim a piece, and because plaintiffs counsel are willing to work for the possibility of a future windfall, these suits are inevitable.

    A “promise” ain’t a contract, so good luck to these bros.