Lawsuit Alleges that Snap Inc. Lied About Pre-IPO Performance Metrics

A former employee of Snap Inc. is alleging that the tech company lied about its performance metrics to lure investors, that it hired him in an attempt to steal Facebook’s trade secrets, and that it fired him in retaliation for his whistleblowing.

The Former Employee

On August 31, 2015, Anthony Pompliano was hired as the head of Snap’s growth and user engagement team. He was fired after just three weeks in that role. Pompliano alleges that he was fired without cause after his attempt to bring attention to the company’s systemic misrepresentation of its internal key performance metrics, but that Snap lied about its actual reason for firing him.

Pompliano states that his firing by Snap Inc. resulted in the loss of his employee stock options and potential salary and created a “major eye-sore” on his resume. Pompliano alleges that when Snap Inc. was called for a reference after his firing, it falsely presented him as incompetent, which prevented him from being hired in similar roles. Pompliano is now working as a venture capitalist in his own firm.

The Lawsuit

Pompliano filed suit in Los Angeles County Superior Court, arguing that he was a whistleblower who suffered retaliation from the tech company. Pompliano alleges that Snap has been “falsely representing itself,” that it hired him away from Facebook to gain access to confidential information (“The real reason Snapchat hired Mr. Pompliano away from Facebook was not to build a growth team, but for the nefarious purpose of obtaining Facebook’s confidential and proprietary information”), and that he was fired under false pretenses when he raised his concerns about the company’s systemic misrepresentation of its key performance metrics.

The complaint claims that, “Snapchat will not let anything stand in its way of an IPO, including its obligations to represent material facts accurately.”

Pompliano claims that Snapchat said that it was firing him for incompetency and “not adequately performing in his position,” but says the real reason is that he refused to provide confidential information about Facebook’s business and raised concerns that Snapchat misrepresented itself to “the public, advertisers, prospective employees, or in connection with its planned IPO.”

Pompliano additionally alleges that “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.”

The Response

Pompliano’s attorney, David Michaels, has stated that information is being withheld while the court decides whether any of it is subject to a confidentiality agreement. Michaels has said that he doesn’t believe that any information is confidential and that he would oppose any efforts to prevent the information from becoming public. Michaels has also stated that, “We believe Snap was falsely representing things, preventing our client from getting a new job and sabotaging new ventures of his.”

Snap Inc. has denied all allegations, stating “We’ve reviewed the complaint. It has no merit. It is totally made up by a disgruntled former employee.”

Photo Credit: Snap Inc IPO NYSE, Anthony Quintano, Attribution 2.0 Generic (CC BY 2.0).