The wild and woolly world of celebrity autographs at cons (see “Stars Can Make Up to $500,000 per Convention”) just got a little crazier with the news that Wizard World Inc. has filed suit against former Chief Marketing Officer Steve Shamus, alleging over $1 million in misappropriated assets and other damages. The suit, filed in federal court on October 28, alleges that Shamus, in his role for the company, diverted autographed products from talent he contracted to appear at the company’s shows and sold them, “…sometimes through one or more outlets owned by members of his extended family in the New York metropolitan area.”
Shamus did not pay for the autographs he received from celebrities he booked, the suit alleges, “…all of which were provided through plaintiff’s retention of the celebrity.”
The suit also alleges that Shamus “…routinely negotiated ‘fixed fee’ deals under which Wizard World lost money, but defendant gained access to a celebrity from whom he could obtain valuable signatures.”
Things apparently started blowing up around mid-October. The company’s stock dropped 18% on October 17, reflecting an unusually high trading volume for the closely held stock.
On October 18, the suit alleges, Shamus presented an “Employment Letter” purportedly signed by his brother Gareb Shamus in his role as CEO of Wizard World in May 2011 (Gareb Shamus left the company late that year, see “Gareb Shamus Resigns as Wizard World CEO”), and demanded payment under its terms. “The Letter is a fraud and a fabrication,” the lawsuit alleges, presented because Shamus was “no doubt sensing that his employer would soon uncover his illegal scheme,” and the company rejected Shamus’ demand.
On October 26, according to the termination letter filed with the company’s suit, CEO John Maatta sent an email “communicating business issues and concerns,” to which Shamus responded that contact should be made with his attorney. That same day, according to the suit, Shamus attempted to delete the entire contents of his company email account.
On October 27, the company terminated Steve Shamus. On the same day, a third Shamus brother, Kenny Shamus, resigned from the board of directors, according to an SEC filing.
On October 28, the lawsuit was filed. The company is suing to recover “all compensation, salary, commissions, and bonuses paid to defendant during the period…,” the fair value of the autographs “misappropriated” by Shamus, other damages, and return of the company’s laptop containing confidential information.
Wizard World had a tough go last year, losing $4.3 million, and brought in a new CEO in April (see “Wizard World Brings in New CEO”). It’s started to turn things around (see “Wizard World Turns Profit in First Quarter”), but is cutting back on shows again in 2017 (see “Wizard World Cuts Back on Shows Again in 2017”).