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A former Better.com employee has sued the company and its chief executive, Vishal Garg, alleging they provided misleading statements to investors about the digital mortgage firm's financial prospects and performance.
Sarah Pierce, a former executive vice-president for sales and operations at Better.com claimed in her lawsuit that Garg misrepresented company's statements to ensure investors go through with a SPAC merger instead of withdrawing due to its financial condition.
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. SPAC deals were among the hottest investment trends during the pandemic as early-stage companies looked to go public.
Pierce said in the lawsuit that she was pushed out of her role in February in retaliation for raising concerns about the deal. She is seeking financial compensation.
A Better.com lawyer has rejected the claims and called them "without merit". "The company is confident in our financial and accounting practices, and we will vigorously defend this lawsuit," the lawyer added.
Founded in 2016 and headquartered in New York, Better.com offers mortgage and insurance products to homeowners through its online platform. Last year, Garg sacked 900 employees over a Zoom call.