Tronox CEO takes leave in wake of SEC litigation

STAMFORD — Tronox Holdings, one of the world’s largest titanium producers, announced this week that CEO and Chairman Jeffry Quinn was taking a leave of absence as a result of his involvement in federal litigation alleging that another man engaged in insider trading of another company’s shares.

Quinn informed the Tronox board last week that he had been referenced as an unnamed individual in a Securities and Exchange Commission lawsuit and related criminal complaint against chemical manufacturing company Ferro Corp., Stamfordbased Tronox said in an announcement. Quinn served as a board director for Ohio-based Ferro from May 2013 through August 2016.

The SEC’s lawsuit alleges that shortly before a March 2016 news report about an unnamed private equity firm’s offer to acquire Ferro that defendant Jason Peltz, 37, of Long Island City, N.Y., received “material nonpublic information” about the private equity firm’s interest in Ferro. It came from an unnamed Ferro board member and/or the board member’s fiancée who is now his wife, the lawsuit says.

When Peltz obtained the information, he was close friends with the Ferro board member and his fiancée, according to the SEC.

After the report, the price of Ferro’s stock increased by about 5 percent and the volume of trading increased “exponentially,” the SEC said.

Seven brokerage accounts connected to Peltz through his trading or tipping of others made illegal insider-trading profits of approximately $1 million, the SEC alleges. The board member and his fiancée were “in direct contact” with Peltz in the weeks surrounding his illegal trading of the Ferro stock, the SEC said.

In response to an inquiry from Hearst Connecticut Media, an SEC spokesman declined to comment on whether Quinn was the board member referenced in the litigation.

Neither Tronox nor Tronox’s shares are referenced in the complaints.

Executive Vice Presidents John Romano and Jean-Francois Turgeon took over as Tronox’s interim co-CEOs during the leave of absence for Quinn, who has served as CEO since December 2017. While serving as the interim CEOs, Romano and Turgeon will maintain their respective roles as chief commercial and strategy officer and chief operating officer.

In addition, Ilan Kaufthal, the board’s lead independent director, has been elected interim chairman. Those changes were enacted immediately.

“As we closely monitor developments with respect to the complaints, the board has determined that Mr. Quinn’s leave of absence and the appointment of John D. Romano and Jean-François Turgeon as co-CEOs on an interim basis are in the best interests of Tronox and its stakeholders,” Kaufthal said in a statement. “The board’s focus on maintaining a robust governance and succession planning process enabled our swift response to ensure the company continues to execute on its long-term strategic plan.”

In April 2019, the company completed the $1.7 billion acquisition of the titanium dioxide business of Saudi Arabian firm Cristal, after settling a 16-month legal dispute with the Federal Trade Commission.

The FTC had argued that the deal would reduce competition in the market for titanium dioxide, a brightwhite substance used as a colorant in many consumer and industrial products.

But Tronox finally gained the agency’s approval to create the world’s “largest vertically integrated titanium dioxide producer” by agreeing to the $700 million sale of Cristal’s North American titanium dioxide business.

Reflecting the impact of the Cristal transaction, Tronox produced 2019 revenues of about $2.6 billion, up 45 percent from 2018. For the year, it recorded a loss of $109 million.

Tronox operates with nearly 7,000 employees across six continents. Its main offices are based in the downtown, at 263 Tresser Blvd.