Legal woes threaten Better.com’s very existence, but denial surrounding the trouble they’re in comes as they continue to move forward with their SPAC merger plans. The most recent news concerning the controversial CEO Vishal Garg and his company Better.com, officially known as Better Holdco Inc., involves a probe and request for information by the SEC that has resulted from a lawsuit filed in June by former Executive Vice President of Sales and Operations, Sarah Pierce.
The lawsuit alleges that CEO Garg, several executives, and the company itself knowingly misled investors before their SPAC merger deal and fired Ms. Pierce when she raised the alarm. Her lawsuit is asking for $195 million in compensatory and punitive damages. A company lawyer for Better says the lawsuit has no merit, and they will vigorously defend themselves against it. However, the SEC isn’t so sure about that.
Better.com, The SEC & The SPAC
According to the Wall Street Journal, the Securities and Exchange Commission, better known as the SEC, has requested documents from Better and Aurora Acquisition Corp., their blank-check company, concerning their business activities. Additionally, they seek information on CEO Vishal Garg and his business activities in light of Pierce’s allegations in her lawsuit. While Better released a statement saying, “the company is confident in our financial and accounting practices, and we will vigorously defend this lawsuit,” there seem to be reasons as to why that might not be the truth.
Inman reports that the banks, CitiGroup and Barclays, who were advising Better and Aurora, have now officially resigned their positions, waiving over $16 million in fees. The fees would have been paid after the companies completed their SPAC merger. Even Bank of America, which was not officially retained by Better, indicated it was resigning from any role it may have had, implied or otherwise. Yet it was confirmed in a legal filing on July 14th, 2022, that they are still attempting to move forward with the deal. They must complete the merger by a deadline of September 30th, or it will be null and void.
Background On Better.com
We’ve covered Garg’s shady behavior in the past, so his current unscrupulous dealings are not a shock. His leadership has been less than savory, saying crazy things to employees, like the email sent company-wide reading in part:
“You are TOO DAMN SLOW. You are a bunch of DUMB DOLPHINS and…DUMB DOLPHINS get caught in nets and eaten by sharks. SO STOP IT. STOP IT. STOP IT RIGHT NOW. YOU ARE EMBARRASSING ME!”
Or perhaps you remember Garg’s prediction for this year’s interest rates, citing they would stay low because President Biden would die from COVID. He is clearly a man who struggles with impulse control. But what is surprising is that he’s still pushing ahead with the SPAC merger, despite the overwhelmingly bad press both he and his company have drawn.
Since Garg’s fateful Zoom call in December 2021, when Better had 10,400 employees, they’ve laid off 7,500–a loss equal to 72% of its workforce. At the end of May 2022, they had about 2,900 employees in both the U.S. and India, where Garg was born. The Indian Express has also revealed that Garg had employed about 1,100 people in India, where employees received a stipend from Better/Garg during the pandemic of 10,000 rupees (Rs) a month, equal to about $125 U.S. dollars. They were also given money from Better for costs to get themselves set up to work from home. Oddly, the article said Better originally recruited those in India who had been laid off from the hospitality industry.
All of this financial turmoil, particularly surrounding Vishal Garg, certainly begs the question,
Just how badly did Garg mishandle his own company’s funds?
Maybe this could be answered partly by the company’s over $300 million loss for 2021, despite posting profits of $172 million in 2020. Or possibly there are some answers in the several other lawsuits he’s targeted by multiple investors, including PIMCO and Goldman Sachs, according to TechCrunch, for misdealings in other companies he controlled. In fact, an extremely comprehensive article by Forbes that details all of Garg’s legal battles states: “Ongoing lawsuits accuse Garg or entities he controls of improper and even fraudulent activity at two prior business ventures, and of misappropriating ‘tens of millions of dollars’,” amidst many other facts of his dastardly behavior. And hey, if nothing else, perhaps looking back at our previous warnings could give us some clues. Until then, Better “better call Saul”–if they have any hope of survival.
Rochelle Harris is a passionate writer originally from Phoenix, AZ. who credits her success to integrity and determination. She has a great sense of humor, loves music and her family, and writes fiction and poetry in her spare time. She is excited about the New York experience and lifestyle! Follow Rochelle on Twitter at @LinguisticAnRky or get in touch at [email protected]