Former ThetaRay CEO Sues Chairman Arel Margalit and Company for Breach of Separation Agreement
Mark Gazit, who served as CEO of fintech company ThetaRay for ten years until 2023, filed a lawsuit yesterday at the Central District Court against ThetaRay chairman Arel Margalit, the company, and its American subsidiary, demanding 4.5 million shekels. Gazit alleges that the American subsidiary violated his separation agreement, which included a consulting contract worth nearly 700,000 shekels over two years and the allocation of 1,200,775 stock options. Since the options were not granted, Gazit seeks 3.8 million shekels plus linkage differentials and interest as compensation for the unallocated options.
In his lawsuit, Gazit claims he was subjected to aggressive pressure to leave the company after attempts to exclude him from management, despite being a key figure in ThetaRay's growth into a leading international firm. The company, which develops financial crime prevention solutions with offices in New York, London, Madrid, and Dubai, replaced Gazit with Peter Reynolds. Gazit also asserts that after his departure, he continued providing strategic consulting services, which the company benefited from but refused to formalize or pay for.
The lawsuit accuses Margalit and the company of acting in bad faith by delaying and obstructing the signing of the consulting agreement and misusing the corporate structure to prevent Gazit from exercising his rights. Gazit further alleges that Margalit attempted to sabotage a 2022 fundraising round to force him out. A company source counters that Gazit was dismissed due to professional and performance issues and is now seeking additional payment through false personal attacks.
Gazit, an Israeli-American citizen, was CEO of the Israeli company from 2013 to 2023 and of the American subsidiary since 2016. The lawsuit is represented by attorneys Zohar Landa, Eran Weiner, Gaia Tserfati, and Rotem Bentski from Barnea Jaffa Landa & Co. ThetaRay is represented by attorney Ofer Peart, and JVP, the venture capital fund led by Margalit and a major shareholder, is represented by attorney Ofer Port, who dismissed the claims as baseless and indicated they would respond in court if the lawsuit is officially served.
