Mortgages Fraud Claims And ‘Dumb Dolphins’ A Tangled Past Haunts

By Corruption Buzz On Nov 26, 2022

The $4 billion fintech startup is hurtling towards an IPO. But its volatile leader is fighting multiple lawsuits that could complicate his ambitions.“HELLO — WAKE UP BETTER TEAM,” writes Vishal Garg, the CEO of Better.com, in an email to employees obtained by Forbes. “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.”In many ways, Garg, 42, is the archetypal tech CEO: brilliant, brash and mercurial. Though his outbursts have caused headaches for some staffers, and forced others to quit — according to interviews with 19 current and former employees — such concerns have been overshadowed by Garg’s success in building Better, a venture-backed online mortgage originator that just secured a $4 billion valuation. The New York-based company boasts a fix to the notoriously byzantine home lending process, with a product that offers pre-approval on a mortgage in minutes. Riding the coattails of a white-hot residential lending market brought on by low interest rates and Covid-19, Better has grown exponentially — with more than 2,000 employees hired since the start of the pandemic — and is on track to generate $800 million in revenue this year, according to The Information. In recent weeks, investors poured in another $200 million, securing Garg’s place as one of the world’s buzziest fintech founders, even before news broke that Better may go public next year. “All I can say is the future is coming,” Garg said this summer, months after the company was included on the 2020 Forbes Fintech 50 list. But Better’s investors appear to be overlooking a whole lot more than Garg’s scorched-earth management style: 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.”In fact, Goldman Sachs, which has invested in three of Better’s funding rounds, spent two years accusing entities controlled by Garg of “flagrant self-dealing.” The bank, which did not invest in the most recent funding round, quietly dropped its legal claims in October. Goldman declined to comment on its relationship with Better and Garg or why it dropped its claims, but presumably, it may see more upside from its stake in Better than what it might collect in court. Other parties in that dispute, including PIMCO — one of the world’s largest money managers — are still pursuing claims against companies Garg controlled, alleging they siphoned off money owed to investors in a troubled multibillion dollar mortgage portfolio. Meanwhile, a separate group of investors tied to management of the portfolio filed a lawsuit in June accusing Garg and his associates of fraud — a claim that Garg’s attorneys have asked the court to dismiss. Yet another legal battle involving Garg has dragged on for the better part of a decade.