But, according to a lawsuit filed in the Superior Court in California, there was oh so much more going on under Young’s nose at the video tech group, which floated in 2018 with the support of Ashok Jacob’s Ellerston Capital (owner of 12.5 per cent of the group), and which counts Phil King’s Regal Funds Management as a 9.85 per cent shareholder.
Jeromy Young started Atomos in 2010.
Estelle McGechie, the former CEO of Atomos who the company said in April was sacked “primarily because she has not yet relocated to Australia”, has alleged, rather, that she was wrongfully terminated because she “dared to speak up about rampant illegal conduct at Atomos”.
The Silicon Valley-based McGechie, a former Apple developer who was appointed Atomos CEO in September 2021, has alleged Atomos engaged variously in “securities fraud and revenue manipulation”, “falsely reporting material sales forecast information”, “channel stuffing” (shipping excessive stock to distributors to artificially boost short-term sales figures), and “insider trading”.
She also cites an “insidious boys’ club culture” at Atomos, a female staff member who was allegedly “sexually harassed and assaulted” by an unnamed executive who went unpunished, and rife “gender discrimination and retaliation”.
On its part, the Atomos board said it “considers the claims to be unfounded”, “will vigorously defend any claims against the company” and “is also progressing various claims against” McGechie.
McGechie’s claims centre on what she describes as her attempts to flag concerns over allegedly fraudulent sales, for which she believes she was sacked in retaliation.
Channel stuffing
She claims Atomos allegedly engaged in “channel stuffing to fraudulently recognise increased sales revenue and manipulate its performance numbers” and “to meet analyst forecasts … and maintain an artificially inflated share price”.
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