CartaThe 11-year-old, San Francisco-based company whose core business is selling software to investors to monitor their portfolios has sued its former CTO, Jerry Talton, whose The company said it was fired “for a reason” nearly three weeks ago. on Friday, December 23.
In it lawsuitCarta is suing Talton for damages, citing his “wrong and illegal actions as Carta’s chief executive officer” and alleging that he both betrayed the company and sexually harassed him. company employees despite being assigned a role that comes with “hundreds of thousands of dollars in salary and benefits, and substantial equity rewards.”
On first reading, it might seem like a company throwing a sink at someone would be a tactically clumsy (and illegal, Carta) whistleblower.
Specifically, according to the complaint, Talton was placed on administrative leave last October after sending a letter to Carta’s board of directors, citing numerous “problems” with the company’s culture.
Carta said Talton’s leave was in order for the board to “facilitate” an “independent” investigation, but during that time, the company discovered that Talton had kept records recording video meetings at work with Carta’s general counsel without her knowledge. How? According to the complaint: “[D]in a confidential mediation involving a former female Carta employee (a mediation to which Talton was not a party), on 8 November 2022, Carta’s Chief Consultant, April Lindauer, copied an email from Talton to that former employee and her advisor, apparently by mistake, stating ‘I think you should read the whole thing’ and including an audio recording of the recording between Talton and Lindauer from September 27, 2022. The email also includes an indication that the audio recording was uploaded to the file-sharing platform, DropBox.”
Oi.
The company said it subsequently asked Talton to return all of Carta’s recordings and transcripts and other assets to Carta, and to provide copies of all recordings and transcripts. to “authorized company investigators”.
Talton, who Carta believes “also surreptitiously recorded at least two members of Carta’s Board of Directors, as well as Carta’s Founder and CEO, as well as executives and employees.” different from Carta,” said no.
We reached out to both Carta and Talton this evening for comment; No response as of the time of our publication.
A spokesperson exclusively told the San Francisco Business Times that Carta co-founder and CEO Henry Ward is serving as Interim CTO until the position is filled.
The lawsuit appears to be damaging to both sides.
At the end of Carta’s long list of allegations against Taton, Carta said that Taton sent and received “obscene, offensive, discriminating and harassing messages with at least nine women including during working hours” work and on Carta’s system,” and that Talton sought and received “benefits and privileges to which he was not entitled, including but not limited to the misuse of his corporate credit card for personal matters and repeatedly tried to book travel outside of company policy.”
Before Carta, Talton — who holds a PhD in computer science from Stanford and two degrees from the University of Illinois at Urbana-Champaign — spent a year and a half as engineering director at Slack. He also co-founded a software startup that has since shut down. seed sponsorship of NEA and Andreessen Horowitz, and spent two years as a research scientist at Intel, according to LinkedIn.
He joined Carta as chief technical officer in 2018 and was promoted to CTO in 2020.
Meanwhile, Carta was previously flagged for having a “culture” issue. In 2020, the company’s former vice president of marketing sued Carta, alleging sexist attire, retaliation, wrongful termination and violations of California’s Equal Pay Act. (We characterize that case here.) Soon after, four employees spoke on file to the New York Times, telling the news outlet that when they expressed concerns about the way the company was run, they being pushed aside, demoted or have their pay cut.
The problem seems to extend to the company’s treatment of some of its customers. Several people TechCrunch has interviewed over the past few months have expressed dissatisfaction with Carta and the service they receive from Carta representatives. One, a fund manager currently in the process of transitioning away from the platform, told this editor last week that his team had “four different account managers in less than two years time.” join in Carta; it certainly doesn’t help with continuity and understanding of our fund and needs.”
A separate fund manager we interviewed last week complained about the “lack of internal communication,” saying it was “like working with four service providers.” Carta will “ask you for documentation that they have on file and should know they have on file,” she said. “I don’t have to follow up; that’s why i pay for fund management. They will tell you to check the ‘portal’ and that portal is terrible.”
It was “wretched,” the person added. “It’s like a technology-first solution for the service industry and I think they need to wake up.”
Carta has about 2,000 employees, based on their LinkedIn profiles, though that number is probably lower in reality. Carta laid off 16% of its staff during the peak of the pandemic; Last month, according to a conversation posted on the anonymous professional network Blind, Ward told employees that another round of layoffs was in the works.
Carta has raised a total of $1.1 billion from investors, according to Crunchbase. It announced its eighth and most recent funding round in August 2021: a $500 million Series G led by Silver Lake and values the company at $7.4 billion.
In addition to Silver Lake, some of its biggest backers include Spark Capital, Social Capital, Menlo Ventures, and Andreessen Horowitz.
Above: Henry Ward, Co-Founder and CEO of Carta; he incubated the company, originally called eShares, with serial entrepreneur and longtime investor Manu Kumar.
