TAMPA, Fla. (Legal Newsline) - The founder and former chief operating officer of a cannabis-based pharmaceuticals company filed a lawsuit against the company and its board of directors for wrongful termination on Wednesday.
In the suit filed in Hillsborough County, Fla., Circuit Court, Gary M. Cohen alleges he was terminated after pointing out multiple examples of corporate wrongdoings by CannaPharmaRX and attempting to have director and chairman of the board Gary Herick removed from his position.
Cohen also says his lawsuit, which was removed to U.S. District Court for the Middle District of Florida, serves as a derivative action.
"This is a derivative action because CannaPharmaRx, Inc. as a whole has been harmed due to Defendants’ corporate waste, mismanagement, and breach of their fiduciary duties to investors as a whole," the complaint says.
Board members Gerald Crocker, James Smeeding, Robert Liess and Matthew Sherwood are co-defendants.
A breach of fiduciary duty is among a laundry list of claims by Cohen against the board of directors. It also includes gross corporate mismanagement, excessive self-compensation, breach of implied contract, tortious interference with business relationships and other forms of misconduct.
Specifically, Cohen alleges Herick engaged in tax fraud by assigning personal expenses as business expenses, failed to withhold FICA and Social Security taxes on its employee payroll, and failed to accede to his own demands for access to accounting and corporate records.
As Cohen pressured the defendants for the financial information and insisted they stop their illegal activities, he alleges the board conspired together to remove him from his positions at CannaPharmaRX and steal his 2.25 million shares of stock.
The suit calls his removal a retaliatory personnel action in violation of Florida's Whistleblower Act, 448.102(3), Florida Statutes.
Cohen was paid $15,000 per month with an agreement that his salary would be increased to $23,000 per month upon the company raising $25 million.
Attorney Dale James Morgado is representing Cohen.
U.S. District Court for the Middle District of Florida case number 8:14-cv-02969.