The boss at online mortgage lender Better allegedly misled investors about the company’s performance and once claimed its sales would improve because “President Biden will die of COVID,” according to allegations included in a lawsuit filed by a former senior executive.
CEO Vishal Garg — who infamously fired more than 900 employees over a Zoom call last year — misrepresented the company’s business metrics to ensure the firm’s plan to go public through a SPAC merger would move forward, claims the lawsuit filed by Sarah Pierce, Better’s former executive vice president of sales and operations.
The lawsuit also alleviates that Garg ordered a hiring spree at Better even after Pierce and other executives urged cost-cutting measures due to looming interest rate hikes and other market difficulties.
“CEO Garg overruled Pierce, stating to Pierce and other executives that company sales would increase because ‘President Biden will die of COVID,’ this will cause interest rates to fall, and save the company from its worsening financial condition,” the lawsuit said.
The lawsuit further alleges that Garg repeated his claim about Biden “on several occasions over a period of several weeks to at least 50 other executives and senior employees of the company and to the board of directors.”
As The Post previously reported, Pierce was one of several executives who left Better earlier this year — an exodus that occurred after Garg’s Zoom call mass firings went viral.
Pierce’s lawsuit alleges that she was forced out of the company in retaliation after she pushed back on Garg’s directives and raised concerns that he was misleading investors about Better’s financial status.
The former Better employee claims that Garg and the company “retaliated against her by scapegoating her for the company’s deteriorating financial state and blaming it on her incompetence.”
“We don’t comment on ongoing litigation,” a lawyer for Better.com said in a statement on the lawsuit. “However, we have reviewed the claims in the complaint and strongly believe them to be without merit. The company is confident in our financial and accounting practices, and we will vigorously defend this lawsuit.”
Efforts to reach Pierce for comment on the lawsuit were not immediately successful. Pierce is seeking compensatory damages, punitive damages and coverage of her legal fees.
Better’s merger agreement deal, originally reached in May 2021, has yet to close. The company lost $304 million last year, according to its filings.
Pierce’s lawsuit claims that Garg told the company’s investors and board of directors that Better could achieve profitability by the first quarter of 2021 despite receiving warnings from Pierce and others “explicitly stating that this outcome was not possible.”
Garg and Better’s leadership team have been under fire for months during a downturn in the online mortgage lender’s business.
During his bloodletting of workers last December, Garg accused at least 250 workers of effectively “stealing” from Better through a lack of productivity. Garg later apologized for his handling of the situation and took a short leave of absence before returning to his role.
TechCrunch, which first reported Pierce’s exit last February, noted at the time that there was “a lot of tension” between her and Garg following the mass layoff.
In March, The Post reported that Better laid off more than 3,000 staffers or roughly 35% of its corporate workforce. At the time, CFO Kevin Ryan noted the firm was “streamlining” operations and had to adjust to “volatility in the interest rate environment and refinancing market.”
Some laid-off workers first learned their fates when they received severance checks — an incident that drew furious responses on the anonymous corporate message board Blind. Better acknowledged the mishap and said it was unintentional.
In April, footage surfaced of Garg’s remarks immediately after the infamous Zoom layoff took place. In the leaked video, Garg said the company had lost $100 million the previous quarter and that the firm had “probably pissed away $200 million” by over-hiring.