Carta, previously sued for gender discrimination, is now suing its former CTO • TechCrunch
Carta, the 10-year-old San Francisco-based company whose main business is selling software to investors to track their portfolios, has sued its former chief technical officer, Jerry Talton, who the company says was fired “for cause “Nearly three weeks ago, Friday, December 23.
In his lawsuit, Carta is suing Talton for damages, citing “his wrongful and unlawful acts as an officer of Carta” and suggesting that he both betrayed the company and sexually harassed its employees despite the fact that one gave him a role with “hundreds of thousands of dollars”. in salary and benefits, and substantial equity awards.
At first glance, it looks like a company throwing the kitchen sink at a would-be whistleblower whose tactics were clumsy (and illegal, Carta says).
Specifically, according to the complaint, Talton was placed on administrative leave in October last year after submitting a letter to Carta’s board of directors, pointing out various “problems” with the company’s culture.
Carta says Talton’s leave was intended to allow the board to “facilitate” an “independent” investigation, but that during that time the company discovered Talton kept audio recordings of workplace video meetings with the General Counsel of Carta without his knowledge. How? According to the complaint:[D] In a confidential mediation involving a former Carta employee (a mediation to which Talton was not a party), on November 8, 2022, Carta General Counsel April Lindauer received a copy of an email from Talton to this former employee and her lawyer, apparently in error, stating “I think you should read everything” and including a transcript of an audio recording between Talton and Lindauer from September 27, 2022. The email also included an indication that the audio recording had been uploaded to the file-sharing platform, DropBox. »
The company says it subsequently demanded that Talton return all recordings and transcripts and other Carta property to Carta and also provide copies of all recordings and transcripts to “company-authorized investigators.”
Talton, who Carta said “also surreptitiously registered at least two Carta board members, as well as Carta’s founder and CEO, and other Carta executives and employees,” said no.
We reached out to Carta and Talton earlier in the evening for comment; neither had responded at the time of our publication.
A spokesperson separately told the San Francisco Business Times that Carta co-founder and CEO Henry Ward served as interim chief technical officer until the position is filled.
The lawsuit seems likely to hurt both sides.
Towards the end of Carta’s long list of accusations against Talton, Carta says that Talton both sent and received “sexually explicit, offensive, discriminatory and harassing messages with at least nine women, including during work hours. and on Carta’s systems”, and that Talton sought and obtained “benefits and privileges to which he was not entitled, including, but not limited to, the misuse of his credit card from business for personal gain and repeated attempts to book travel outside of company policy”.
Prior to Carta, Talton — who has a doctorate in computer science from Stanford and two degrees from the University of Illinois at Urbana-Champaign — spent a year and a half as director of engineering at Slack. He also co-founded a since-closed software startup that was funded by NEA and Andreessen Horowitz, and spent two years as a research scientist at Intel, according to LinkedIn.
He joined Carta as Director of Engineering in 2018 and was promoted to Technical Director in 2020.
Carta, meanwhile, has previously been flagged for having a “culture” issue. In 2020, the company’s former vice president of marketing sued Carta, accusing the team of gender discrimination, retaliation, wrongful termination and violation of the California Equal Pay Act. (We’ve featured that case here.) Shortly after, four employees spoke officially with The New York Times, telling the outlet that when they raised concerns about how the company was run, they were sidelined, demoted, or took pay cuts.
The problem appears to extend to the company’s treatment of some of its customers. Several people interviewed by TechCrunch over the past two months expressed dissatisfaction with Carta and the service they received from its representatives. One, a fund manager who is currently leaving the platform, told this editor last week that his team had “four different account managers in less than two years at Carta; it certainly did not help with the continuity and understanding of our fund and our needs.
A separate fund manager we interviewed last week complained of a “lack of internal communication”, saying it was “like working with four service providers”. Carta “will ask you for a document that they have on file and should know they have it on file,” she said. “I shouldn’t have to keep track; that’s why I pay for the administration of the fund. They will tell you to check ‘the portal’ and the portal is terrible.
It’s “miserable,” the person added. “It’s like a technology-first solution for a service industry and I think they need a wake-up call.”
Carta has around 2,000 employees, judging by its LinkedIn profile, though that number is presumably lower in reality. Carta laid off 16% of its employees at the height of the pandemic; last month, according to a conversation posted on the anonymous professional network Blind, Ward told employees that another layoff was in the works.
Carta has raised $1.1 billion in total from investors, according to Crunchbase. It announced its eighth and final funding round in August 2021: a $500 million Series G led by Silver Lake and valued 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.
Pictured above: Henry Ward, co-founder and CEO of Carta; he incubated the company, originally called eShares, with serial entrepreneur and longtime investor Manu Kumar.
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