Bloomberg Law
Dec. 4, 2019, 4:56 PM

VirnetX Investor Seeks Records to Probe Nepotism, Insider Trades

Mike Leonard
Mike Leonard
Legal Reporter

Software company VirnetX Holding Corp. was hit with a Delaware lawsuit seeking internal records that will allegedly show nepotism, self-dealing, insider trading, weak governance, and a corporation run “as a personal piggy-bank.”

VirnetX CEO Kendall Larsen is paying his wife, son, and stepsons—who comprise about a fifth of the 21-employee company—salaries totaling $2 million a year, according to the Chancery Court complaint filed Dec. 3 by an individual shareholder. That’s allegedly well above the pay rate at comparable companies.

Larsen also serves as the company’s president, board chairman, and, “inexplicably,” its chief compliance officer, the suit says. That creates significant ...