Better.com CEO Vishal Garg Sued by Ex-Employee for 'Misleading Investors'

"We have reviewed the claims & strongly believe them to be without merit," a Better.com lawyer said.

Better.com CEO Vishal Garg and the firm have been sued by a former employee for allegedly misleading investors.

(Photo Courtesy: Twitter/@lucasmelee)

Better.com Chief Executive Officer (CEO) Vishal Garg, who made the headlines last year for firing 900 of his company's employees over a Zoom call, has been sued by a former employee for "misleading investors."

As per a report by Reuters, Sarah Pierce, the firm's former executive vice-president for sales and operations, filed a lawsuit against Better.com and Garg on Tuesday, 7 June, in a United States district court.

In her lawsuit, she alleged that Garg gave misleading statements about the US-based mortgage lending company's performance and financial prospects. The investors were led by Garg to go public through a special-purpose acquisition company (SPAC) merger, claimed Pierce.

The deal with SPAC Aurora Acquisition Corp was valued at $7.7 billion and agreed to in 2021.

Pierce further alleged that in February, she was forced out of her role when she raised concerns about the deal. She has reportedly sought financial compensation.

Pierce's 'Claims Without Merit': Better.com Lawyer

A Better.com lawyer told Reuters that the claims were "without merit."

"We have reviewed the claims in the complaint and strongly believe them to be without merit," the lawyer wrote in a statement emailed to Reuters.

"The company is confident in our financial and accounting practices, and we will vigorously defend this lawsuit," the statement further said.

What Had Happened?

Vishal Garg, Better.com's Indian-American CEO, had received heavy backlash for firing 900 employees of the firm over a Zoom call on 8 December last year.

He had cited market efficiency, performance, and productivity as reasons for the decision.

A video of him making the announcement had gone viral on social media.

"This isn't news that you're going to want to hear... If you're on this call, you are part of the unlucky group that is being laid off. Your employment here is terminated effective immediately," Garg was heard saying in the video clip.

After inviting criticism for his insensitive approach to laying off a huge number of employees, Garg apologised.

"I failed to show the appropriate amount of respect and appreciation for the individuals who were affected, and for their contributions to Better. I own the decision to do the layoffs, but in communicating it, I blundered the execution. In doing so, I embarrassed you," he wrote in an email which was leaked online.

(With inputs from Reuters.)