Online mortgage lender Better.com and its Chief Executive Vishal Garg allegedly misled investors in financial filings and other representations it made as it attempts to go public, according to a lawsuit filed Tuesday by a former top executive at the company.
Sarah Pierce, Better.com’s former executive vice president for sales and operations and one of its top executives, said Garg and the company allegedly misrepresented Better.com’s business and prospects to keep investors onboard with a planned merger with a special-purpose acquisition company, or SPAC. The deal was agreed to last May and has yet to close.
Pierce said she was pushed out of her role at the company in February in retaliation for raising these issues. She has also filed a complaint alleging retaliation with the Occupational Safety and Health Administration under the Sarbanes-Oxley Act, according to a footnote in the suit.
“We have reviewed the claims in the complaint and strongly believe them to be without merit,” Better.com said in a statement after the initial publication of this article. “The company is confident in our financial and accounting practices, and we will vigorously defend this lawsuit.”
Better.com was a major winner of the boom in housing prices and mortgage refinancing that accompanied the pandemic and low interest rates. The company grew revenue nearly 10-fold to $876 million in 2020 from the year prior, posted a profit of $172 million and hired thousands as it rushed to keep up with the market, company filings said. It raised $500 million from SoftBank Group Corp.
last spring and weeks later said it planned to go public at a valuation of $7 billion.
An expanded version of this report appears on WSJ.com.
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