Some EarthLink executives invested with colleague who faces lawsuits
Involvement was personal, firm says
Atlanta Journal-Constitution
Several of EarthLink's top executives were also investors with Reed
Slatkin, one of the company's founders who has been accused in lawsuits of
bilking investors out of millions of dollars.
Sky Dayton, chairman of the Atlanta-based Internet service provider, and
Chief Executive Garry Betty were among investors with Slatkin, said
EarthLink spokesman Dan Greenfield.
Dayton and Betty were unavailable for comment. Other EarthLink officials
were also apparently involved, but their names have not yet emerged and
Greenfield declined to name them.
He also declined to say how much they might have invested or how they
might react to this week's events.
But he emphasized that there is not corporate involvement: "Sky and Garry
were investors with Reed. But they were personal investments, not
EarthLink investments."
Slatkin himself is referred to as a co-founder --- along with Dayton ---
of the company. Slatkin and a partner contributed $100,000 to the
formation of EarthLink in 1994. Slatkin, who was a board member, never had
any say in the day-to-day running of the company, Greenfield said.
He resigned from the EarthLink board on April 26, acting of his own
accord, Greenfield said.
Slatkin, who filed for Chapter 11 bankruptcy protection this week, has
been sued by at least three investors who claim he ran a pyramid scheme,
collecting upward of $300 million from friends, colleagues and members of
the Church of Scientology, to which he belonged.
The money was to be invested and managed, according to those who sued.
Those suits detail debts of more than $35 million.
An investigation into the alleged scheme is being conducted by the U.S.
Securities and Exchange Commission, according to the Los Angeles Times.
EarthLink, which merged last year with Atlanta-based MindSpring
Enterprises, now has nearly 5 million subscribers to its Internet access.
The company is one of the nation's three largest Internet service
providers.
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Friday, May 4, 2001
by Michael E. Kanell - Staff
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