Former Better.com executive alleges company misled investors before SPAC – TechCrunch

One of Better.com’s former executives has filed a lawsuit against the online mortgage lender, alleging the company and its CEO Vishal Garg misled investors when it tried to go public through a SPAC, reports the the wall street journal.

Sarah Pierce served as Executive Vice President of Customer Experience, Sales and Operations at Better.com before separate from the company earlier this year. At that time, it was unclear whether she left voluntarily or was asked to quit, but Pierce now says in her suit that she was kicked out.

In his lawsuit filed today, according to the Wall Street Journal, Pierce alleges that Better.com misrepresented its business and outlook so it could move forward with a after-sales service this would have given the company a net worth of approximately $7.7 billion. The SPAC has been delayed and has not yet taken place.

His complaint, the Journal reports, alleges that Garg and Better’s treatment of him constituted unlawful retaliation, defamation and intentional infliction of emotional distress.

At the time of his departure in February, TechCrunch reported that — according to sources familiar with internal company events — Pierce tried to defend the hundreds of employees the company fired in December after the CEO publicly called them out. described as lazy and unproductive. This reportedly caused “a lot of tension” between her and Garg and the board. Pierce was reportedly upset with the way Garg publicly disparaged the employees, the majority of whom had reported to him, after fire them hard via Zoom.

TechCrunch has reached out to Better.com and Pierce and will update this story if and when either of them comments.

Meanwhile, a source familiar with the lawsuit told TechCrunch that Garg “always exaggerated” company numbers and “didn’t listen” to Pierce or any other executive when they raised concerns. Pierce, the source said, would have been kicked out of the company for voicing her concerns.

According to the S-4 filed by Aurora Acquisition Corp., the entity Better.com was to merge with, Pierce earned $856,061 last year, got a $1 million bonus and received $17.37 million. dollars in stock options.

According to Forbes, this is not the first time a female executive has accused the company of inappropriate behavior. The company in April 2021 put former chief product officer Elana Kollner on administrative leave following allegations of bullying and other workplace grievances.

The company has continued to make headlines several times over the past six months. December 1, 2021, Better.com laid off about 900 employees via a Zoom video call that ended up going viral. It wasn’t the first company to lay off people on Zoom during a global pandemic. But it was the way he was treated that offended so many people.

Co-founder Garg has been universally criticized for being cold and insensitive in his approach. He also added insult to injury a few days later publicly accusing affected workers to “steal” their colleagues and clients by being unproductive.

On top of that, just one day beforeCFO Kevin Ryan emailed employees saying the company would have $1 billion on its balance sheet by the end of this week. In the weeks following the layoffs, Garg “apologized“and took a month”Pause.” Meanwhile, employees explained how he “led by fear,and a number of senior executives and two board members resigned.

Then, on March 8, the company laid off about 3,000 of its remaining 8,000 employees in the United States and India and “accidentally rolled out severance payslips too early”.

In April, a filing revealed that Better.com suffered a loss of over $300 million Last yeara sharp turnaround from its profitable 2020 year. Garg is also the target of multiple lawsuits by PIMCO, Goldman Sachs and other investors involving entities he controlled.

Many parties have contacted TechCrunch in recent months, including customers who say they lost money when the company botched their home closures, former employees who say they weren’t given job options. buying stock that was owed to them and still others who say they can’t collect unemployment because Better wouldn’t have paid the proper taxes.

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