Bovie Medical Corp. (NYSE:BVX) is demoting COO Moshe Citronowicz and cutting his pay and benefits after determining that he misrepresented his academic career.
Citronowicz, who has been with the electrosurgery company since 1993, claimed to have a bachelor’s degree in electrical engineering from Israel’s University of Be’er Sheva, according to a regulatory filing.
The Melville, N.Y.-based company’s board reviewed the allegations against Citronowicz before deciding to assess "significant financial and other penalties" Nov. 22, according to the filing, including a $24,000 pay cut.
The penalties are as follows:
- "Mr. Citronowicz will immediately forfeit all stock options issued to him (whether vested or unvested), totaling 75,000 stock options;
- "Mr. Citronowicz’s employment agreement with the company will be immediately cancelled and he will continue to be employed by the company on an at-will basis;
- "Mr. Citronowicz will be immediately reassigned to the position of director of strategic development, reporting to J. Robert Saron, the company’s president and chief sales and marketing officer; and
- "Mr. Citronowicz’s base annual salary will be reduced from approximately $220,000 to approximately $196,000."
"In assessing the appropriate action to be taken in light of the circumstances, the board of directors concluded that it was in the best interest of the company’s stockholders to retain Mr. Citronowicz, who has made significant contributions to the company," according to the filing, which also notes that Bovie will run background checks on all of its executives and directors going forward, "including verification of an individual’s academic credentials prior to making an offer of employment or when senior personnel join the company as a result of an acquisition."
Citronowicz is named in a shareholders’ lawsuit against Bovie alleging that mismanagement and nepotism have caused the company to miss out on commercialization and acquisition opportunities. Claiming that he is Bovie’s “primary decision-maker” and of participating in board meetings despite not holding a seat, the suit also alleges that Citronowicz forced the company to “retain two of his brothers, [Arik] Zoran and [Yechiel] Citronowicz.”
"Y. Citronowicz studies at a religious school in London, England and currently does no work for the company,” according to court documents.
The lawsuit seeks "amounts which [Bovie] has paid to relatives of Citronowicz who are currently employed by the company, or who were employed by the company since 2008, including Arik Zoran and Yechiel Citronowicz,” “any sums” paid in legal fees to defend or indemnify Citronowicz and Makrides in the Livneh litigation, recovery of any damages from that case “including the loss of any revenues which Bovie would have earned or was projected to earn as a consequence of marketing the Livneh technologies.”
Bovie boosted third-quarter profits by 1,475 percent despite a 3.8 percent sales decline, reporting profits of $63,000, or no earnings per share, on sales of $6.3 million for the three months ended Sept. 30. That compares with profits of $4,000, also no earnings per share, on sales of $6.5 million during the same period last year.
A Bovie spokesman declined to comment on the situation.