Better.com and its chief executive, Indian origin Vishal Garg, were sued by a former employee for allegedly providing misleading statements to investors about the financial prospects and performance of the digital mortgage firm.
The former executive vice-president for sales and operations at the SoftBank-backed company, Sarah Pierce, claimed in her lawsuit that Mr Garg misrepresented the company’s statements to ensure investors go through with a SPAC merger instead of withdrawing due to its financial condition.
However, the lawyer of Better.com said the claims were “without merit”.
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, reported Reuters.
SPAC deals were among the hottest investment trends as early-stage companies looked to go public during the pandemic.
In the lawsuit – filed on Tuesday in a US district court, southern district of New York – Pierce said she was thrown out of her role in February for raising concerns over the deal. She is seeking financial compensation.
“We have reviewed the claims in the complaint and strongly believe them to be without merit,” said a lawyer for Better.com in an emailed statement to Reuters.
“The company is confident in our financial and accounting practices, and we will vigorously defend this lawsuit,” added the lawyer.
Better.com, founded in 2016 and headquartered in New York, offers mortgage and insurance products to homeowners through its online platform.
Earlier, Mr Garg had to apologise for how he handled the layoffs after a video of him firing 900 employees over a Zoom call went viral on social media.
