Medbox Inc. (MDBX) , a provider of dispensing machines used by the cannabis industry to secure its product, said that a former employee wrote to the Securities and Exchange Commission alleging wrongdoing by a former officer, and that the company's accountants received a federal grand jury subpoena.
In a Friday, Oct. 31, filing, Medbox revealed that its accountants had received a subpoena from a federal grand jury in August. The filing also said that a former employee had sent a letter to the SEC making allegations about a former company officer who is a current consultant to Medbox. Medbox did not identify the former officer in the filing.
The company said in a subsequent press release on Monday, Nov. 3, that the letter was sent to the SEC in May, apparently in retribution for Medbox's refusal to pay the unidentified employee a cash settlement.
"The former employee vowed to retaliate against the Company in any way he could after his illegal cash demands of the company were ignored," Medbox founder Vincent Mehdizadeh said in the statement. "It now appears that writing a letter to government agencies filled with factual inaccuracies and blatant falsehoods was the most effective way to facilitate that goal."
The company said it's formed a special committee of its board to investigate the allegations in the letter to the SEC and the implications of the federal grand jury subpoena.
Shares of Los Angeles-based Medbox fell $1.50, or 10.8%, to $12.45 on Nov. 3.