What Robert Smith admitted to a tax scam did more than cost him a whopping 140 million dollars. He also rocked Vista Equity Partners, a private equity firm he founded and headed, and some insiders and limited partners were misled (or left in the dark) about the extent of Smith’s legal issues.
behind the scenes: Smith convened a virtual meeting of Vista’s managing director and other top employees on Wednesday to discuss the details of his agreement. One source said he called the overall experience “humble” and said he regretted the “unfair burden” his actions imposed on others, including some Vista colleagues.
Smith also said that Brian Sheth Vista’s co-founder and president will be leaving Vista. Sheth himself did not answer the phone and it does not appear that he was invited to participate.
- Long considered one of Vista’s top deal makers, Sheth told its managing directors in December that he was planning to leave the company or retire.
- However, he has not yet made a formal decision, and he and Smith have not discussed in detail how the departure will be structured. Complexity includes his existing business economics, funding “key workforce” clause and more.
- According to sources, Smith’s tax issue is a factor that breaks the relationship between the two, and Smith’s remarks in the meeting made the eyebrows stand out.
- Look forward to Dyal Capital Partners. Minority stake purchased twice Vista has comments on the final workaround.
Reference : Sheth did not respond to a request for comment, and a spokeswoman for Vista declined to comment.
One of Smith’s biggest internal challenges He presented the seriousness of the investigation as a relatively minor accounting problem, with the perception that he had long underestimated. Or save for a petty data room mention without filing with a specific limited partner.
- But yesterday’s US prosecutor’s press release called it “an illegal plan to cover up income and evade millions of taxes,” and it was even more painful.
- It added that Smith did so “deliberately and deliberately”. This is a bit different from Smith’s story of a naive young investor who follows the tax structure proposed by an older and more experienced limited partner.
- That LP was Robert Brockman, who was charged yesterday with what the DOJ calls the “biggest” tax scam plan by a US citizen. Smith is collaborating on an ongoing investigation.
- Smith and Vista say they are not concerned about the SEC’s follow-up investigation into Smith’s continued ability to run a brokerage firm, but I’m not sure why they are so convinced. Especially if you aren’t pleased with the fact that next year a new sheriff comes into the city and Smith’s fat bank account is mostly what put him in jail.
- Full read Discovery of facts.
conclusion: Smith agreed with the DOJ and the IRS, but the story is not over.