Ex-employee accuses Snapchat of misrepresenting growth
Snapchat has been accused of misleading investors to boost its IPO valuation, according to a lawsuit filed against the firm by a former employee.
In a complaint submitted to Los Angeles Superior Court on Wednesday, the ex-Snapchat employee claims he discovered evidence of misrepresentation and was fired from the company for being a whistleblower.
Anthony Pompliano, who was in his position as growth lead at Snapchat for just three weeks, believes his termination was due to “the avarice of the small group of executives at the helm”, following his apparent discovery of an “institutional pandemic” of misleading information surrounding Snapchat’s IPO.
Snapchat’s parent company, Snap, confidentially filed an initial public offering in November, according to Bloomberg, with sources close to the firm anticipating the messaging app will be valued between $20 billion and $25 billion when confirmation is made in early 2017. If true, this would make it the largest IPO from a US tech firm since Facebook went public in 2012 valued at $81.2 billion.
The complaint, seen by the Hollywood Reporter, is heavily redacted and omits specific details of the accusations against Snapchat, however Pompliano maintains that the firm falsely represented growth.
“Snapchat fraudulently induced Mr. Pompliano away from Facebook to run Snapchat’s new user growth and engagement team by falsely representing to him, among other things, the Company’s growth,” said attorney David Michaels in the complaint.
Snapchat has responded to these claims in a statement to the Hollywood Reporter, claiming the complaint “has no merit” and “is totally made up by a disgruntled former employee.”
IT Pro has contacted Snapchat, but had not received a response at the time of publication.
The complaint also argues that Snapchat poached Pompliano from his former position at Facebook in an attempt to gain insight into the social media’s confidential practices, and pressured him into breaking non-disclosure agreements. It’s alleged that his refusal to do so “drew the ire of Snapchat’s senior management” and he was seen as an “impediment to their planned IPO because he refued to turn a blind eye to Snapchat’s misrepresentations” to advertisers and investors.
“Because the truth concerning Mr. Pompliano’s termination was so potentially damaging to Snapchat’s planned IPO, terminating him wasn’t enough to ensure the public was kept in the dark,” said Michaels. “Accordingly, post termination, Snapchat has sought to destroy his career and reputation by waging a smear campaign against Mr. Pompliano, by making false representations concerning the circumstances of his termination.”
Pompliano is now suing Snapchat for efforts to discredit his character after he had left the company, preventing him from securing future employment.