BackCEO who fired 900 employees on Zoom gets sued for 'misleading investors'
Former Better.com employee has claimed that CEO Vishal Garg misrepresented company's statements to ensure investors go through with a SPAC merger instead of withdrawing due to its financial condition.
PremiumA former Better.com employee has sued the company and its chief executive, Vishal Garg, alleging they provided misleading statements to investors about the digital mortgage firm's financial prospects and performance. Remember Vishal Garg was in news a year back for firing 900 employees over a Zoom call.
Sarah Pierce, a former executive vice-president for sales and operations at Better.com claimed in her lawsuit that Garg misrepresented company's statements to ensure investors go through with a SPAC merger instead of withdrawing due to its financial condition.
Better.com's plan to go public through a merger with a special-purpose acquisition company (SPAC) Aurora Acquisition Corp, in a deal that valued it at $7.7 billion, was agreed to last year and has yet to close. SPAC deals were among the hottest investment trends during the pandemic as early-stage companies looked to go public.
Pierce said in the lawsuit that she was pushed out of her role in February in retaliation for raising concerns about the deal. She is seeking financial compensation.
It is being alleged that Garg has been leading the struggling lender in its effort to merge with a special-purpose acquisition company, or SPAC. After his publically infamous mass firing on a video conference call in December, Garg had accused some of the terminated workers of “stealing" from the company by being unproductive.
Pierce says she pushed the company to put out a statement correcting Garg’s “misinformation" on the terminated employees and personally confronted him, saying she “would not enable his false narrative."
Garg is also being accused of misrepresenting the company’s prospects to investors and directors after he told them the company would return to profitability in the first quarter of 2022 -- “despite Pierce and other senior leaders explicitly stating that this outcome was not possible," according to the complaint.
Better had disclosed in a regulatory filing that its fourth-quarter net losses in FY could reach $182 million. The company fired about 3,000 employees in the U.S. and India in March as rising interest rates weighed on the volume of new loans.
A Better.com lawyer has rejected the claims and called them "without merit". "The company is confident in our financial and accounting practices, and we will vigorously defend this lawsuit," the lawyer added.
Founded in 2016 and headquartered in New York, Better.com offers mortgage and insurance products to homeowners through its online platform.
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