A former Snap Inc. employee has filed a lawsuit claiming that the company hasn’t been honest about its pre-IPO performance metrics. The suit was filed with the L.A. County Superior Court. The filer of the lawsuit, Anthony Pompliano, was at one time the head of Snap’s growth and user engagement team.
The lawsuit accuses the company of systemic misrepresentation of its internal key performance metrics. The lawsuit also alleges that Snap Inc. Chief Strategy Officer, Imran Khan, misled the Alibaba Group when soliciting investment. The company later invested more than $200 million in Snap Inc.
A significant portion of the suit has been redacted so it is difficult to determine just what metrics were alleged to have been misrepresented. The court redacted more than seven pages of the document. The information is being withheld while under review by the court for confidentiality matters, according to David Michaels, Pompliano’s attorney.
According to the lawsuit, Snapchat wooed Pompliano for two months with representations and promises that he would later claim were fraudulent. He says that Snapchat’s compensation package was “massive and unprecedented.” He then says that “at the outset of his remarkably short, three-week tenure at Snapchat,” he realized that he’d been deceived.
The suit also claims that Pampliano uncovered discrepancies in the performance metrics during the course of his employment. He claims that he alerted his superiors about the allegedly false growth metrics, and was fired a short time later. Records show that he was released just three weeks into his tenure.
Mr. Pompliano also alleges that Snap Inc. prevented him from getting hired in similar roles at other companies by falsely presenting him as incompetent when called for reference. He claims that this occurred on multiple occasions. As an example, the lawsuit reports that another social media company began to show interest in Pompliano, but once the company talked to Snapchat, they “abruptly cut off all communications” with Pompliano,
Mr. Michaels asserted, “We believe Snap was falsely representing things, preventing our client from getting a new job and sabotaging new ventures of his.” Mr. Pompliano is seeking an injunction and monetary relief for the loss of his employee stock options and potential salary.
Snap Inc. has denied the accusations. Commenting on the lawsuit, the company said in a statement, “We’ve reviewed the complaint. It has no merit. It is totally made up by a disgruntled former employee.”
Snap’s forthcoming IPO has brought a lot of attention to the company in recent months. If the allegations turn out to be accurate, Snap wouldn’t be the only social media company struggling to properly represent performance. Facebook has admitted to unintentionally misrepresenting multiple metrics, including the average view time for video ads on its platform. Facebook attempted to purchase Snapchat for $3 billion in 2013.