Nasdaq-listed Society Pass (SPI), which provides a data-driven loyalty platform, and its former CMO Thomas O’Connor emerged from a bruising, multi‑year New York trial on February 5 with a mixed verdict that recalibrates liability, equity and control over contested stock issuances.
Justice Joel M. Cohen’s decision upholds earlier valuations of pre‑IPO warrants but applies New York’s “faithless servant” doctrine to strip O’Connor of pay and future vesting beyond July 2019.
Also Read: Dennis Nguyen steps down as Society Pass CEO amidst court cases, SEC probe
At the same time, the court rescinded key contracts executed by O’Connor’s Singapore vehicle, CVO Advisors, for fraudulent inducement. Several headline counterclaims by Society Pass were dismissed for lack of provable damages.
Background and the valuation fight
The dispute traces to a September 2023 ruling that O’Connor had validly exercised a Common Stock Purchase Warrant for 1,148 shares. The valuation of those warrant shares became the case’s financial core. After a 10‑day valuation hearing in late 2024, a Special Referee placed the per‑share value at US$5,763, a figure Justice Cohen confirmed in July 2025. That valuation implied roughly US$6.62 million for the block; with court‑sanctioned penalty interest set at 9 per cent per annum, accrual has pushed the total owed to about US$11.5 million, according to O’Connor’s counsel.
The judgment landed at a precarious juncture for Society Pass. Its SEC Form 10‑Q showed only US$10.9 million in cash; the company had been dropped from the Russell 2000 and its stock had plunged from a US$77 peak to roughly US$0.40. Court filings also disclosed an SEC investigation and a separate suit from ex‑CTO Rahul Narain seeking about US$1.3 million. Society Pass appealed the earlier partial judgment; that appeal remained pending when the trial verdict issued.
Key holdings from the trial
Faithless servant doctrine eliminates pay claims: Justice Cohen found that beginning in June 2019 O’Connor effectively abandoned his CMO responsibilities, including an unauthorised five‑week trip to Japan that produced no meaningful business outcomes. More seriously, in August 2019 he met a lead prospective investor, Lester Chan of Fund Singapore (an equity & lending-based crowdfunding platform), where the court found he disparaged Society Pass CEO Dennis Nguyen, expressed doubt about the company’s viability, and pitched an alternative investment. Under New York law, an employee who becomes disloyal forfeits compensation. The court therefore dismissed O’Connor’s claims for unpaid salary and severance.
Warrant rights preserved, but truncated: The judge reaffirmed that the Common Stock Purchase Warrant was a standalone agreement not tied to employment KPIs. O’Connor had already been awarded US$6,615,934 for shares that vested before June 2019. The trial award adds US$824,109 for shares vesting in June-July 2019. Crucially, any shares vesting from August 2019 onward were forfeited because the court pegged the start of his disloyal conduct to that month. The ruling effectively preserves equity that vested before the loyalty breach and cuts off later vesting.
CVO contracts rescinded for fraudulent inducement: The court found O’Connor misrepresented CVO’s ownership status when he executed a Subscription Agreement and a Software Development Agreement in November 2018, claiming to be CVO’s sole owner despite owning zero shares until May 2019. Because those misstatements materially induced Society Pass to contract, both agreements were rescinded and CVO must return all SPI shares issued under them.
SPI counterclaims fail for lack of proof: Society Pass argued O’Connor’s conduct reduced Fund Singapore’s expected investment from an anticipated US$10-15 million to just US$1 million. The court rejected that causation claim, pointing instead to SPI’s failures to secure a digital wallet license and a strategic partner. Claims for breach of fiduciary duty and unjust enrichment were dismissed where the company failed to present concrete damages or financial records proving improper personal spending.
Financial and corporate fallout
The judgment leaves SPI exposed to a material monetary liability tied to the warrant valuations — US$6.62 million already recognised plus US$0.82 million now, each carrying interest. O’Connor’s legal team places the aggregate with interest at roughly US$11.5 million. That sum is significant against SPI’s limited cash reserves and battered market capitalisation.
Rescinding the CVO agreements reduces dilution by clawing back shares issued under those contracts, but it does not erase SPI’s monetary exposure for warrants that vested through July 2019. The faithless‑servant finding curtails salary and severance outflows and narrows future vesting, providing the company partial financial relief.
Operationally, Society Pass must undertake a cap‑table cleanup to unwind share issuances, update registers and manage potential secondary disputes. Collections and enforcement of the monetary awards will hinge on appeals, interest computations, and any negotiated settlement. With several of SPI’s counterclaims dismissed, the company gains narrative relief but still faces the harder task of stabilising liquidity and restoring investor confidence.
Legal and governance lessons
The case is a stark illustration of how New York courts apply the faithless‑servant doctrine to senior executives, the separability of certain equity instruments from employment terms, and the perils of inaccurate or misleading representations in cross‑border deals. For founders and boards, the ruling underscores the need for meticulous documentation of ownership, clear linkage (or separation) of warrants from employment KPIs, and close oversight of executives’ conduct with investors.
Also Read: US court orders Society Pass to pay pre-IPO shares to co-founder and ex-CMO; company under SEC probe
Conclusion
Justice Cohen’s decision is a split result: O’Connor retains significant pre‑August 2019 equity value but loses salary and future vesting for disloyal conduct, while CVO’s contracts are voided for fraud. Society Pass limits several major counterclaims and claws back shares, yet remains on the hook for warrant‑linked awards and mounting interest — leaving both parties with partial victories and substantial follow‑on risks.
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