Former Red Hat CEO Matthew Szulik says he was victim of financial fraud.
Szulik is suing the investment advisory firm, TAG Virgin Islands LLC, for $60 million plus interest and damages.
The technology entrepreneur and his family say that their investment agreement called for a conservative strategy. Instead, the suit alleges, the firm put the family money into high risk and illiquid holdings without their approval and took millions in kickbacks.
In one example, the suit says TAG sank $19.49 million of the Szuliks’s money into bonds issued by an operator of horse racing stables. The bonds turned out to be “essentially worthless,” the suit said.
The federal suit was filed in North Carolina against the St. Thomas-based investment advisory firm, formerly Taurus Advisors, which the family say represented them from 1996 to 2009.
Szulik, who grew up in New Bedford, Massachusetts, stepped down as Red Hat's CEO at the end of 2007 to deal with family health issues. He left his post as chairman this year. Red Hat, based in Raleigh, makes money selling services and support for its version of Linux for servers.