In Lawsuit, Ex-Snapchat Employee Alleges Fake Growth Numbers
- Author: Eleanor Harrison Jan 08, 2017,
Jan 08, 2017, 0:34
A heavily redacted copy of the lawsuit alleges that Pompliano was recruited to Snap's "new user growth and engagement team by falsely representing to him, among other things, the Company's' growth".
"Snapchat's leadership saw Mr. Pompliano as an impediment to their planned IPO because he refused to turn a blind eye to Snapchat's misrepresentations", it alleges.
Snapchat's ex-employee has filed a law suit against the company for misrepresenting its financial state.
According to Recode, Anthony Pompliano joined Snap in 2015 after leaving Facebook Inc (NASDAQ: FB). Facebook's share price took a minor tumble in the fallout, but the company's stock has since begun to bounce back.
The company issued advertisers refunds for over-billing, according to a report in Business Insider.
The lawsuit further claims that Snapchat set out to "destroy [Pompliano's] career by waging a smear campaign against Mr Pompliano by making false representations concerning the circumstances of his reputation" because the truth surrounding Pompliano's termination could be so damaging to the company's IPO quest.
A spokesperson for Snap Inc said it a statement that the company had reviewed the complaint and "it has no merit".
Snapchat is in deep water after an ex-employee claims he was sacked three weeks into his contract for revealing information that the company was misleading investors by driving up their metrics.
The lawsuit has stated "Mr. Pompliano was terminated because he refused to participate in a scheme to deceive the public and artificially inflate Snapchat's valuation in anticipation of its initial public offering". But a third of the suit's 21 pages filed in the Los Angeles County Superior Court are blacked out by Pompliano's attorney, David Michaels.
Snap management told company employees and third parties that Pompliano was sacked because he was incompetent, according to the lawsuit, even though he had received no negative reviews. Analyst have estimated a sum of $400 million in ad revenues for the company in 2016. He has alleged in his filings that the reason quoted for his termination was also falsified, which has made it hard for him to find another job in the industry.
Pompliano claims he tried to blow the whistle - alerting top Snap executives to the misrepresentations the company had made to the public. The lawsuit also offers a peek at the dirty underbelly of Snapchat's Facebook envy.