Snapchat IPO News: Former Employee Claims Company Lied To Investors

As Snapchat is gearing up for its initial public offering (IPO), a former employee of the company is alleging it has been misleading its investors in order to drive up its value, according to a report from the Hollywood Reporter.

A complaint filed by ex-Snapchat employee Anthony Pompliano against the company accuses its leadership of greed and claims he was dismissed just weeks after leaving his position at Facebook to join the company because he refused to participate in the company's "institutional pandemic" of misrepresentation.

Pompliano spent three weeks at Snapchat, where he was brought in to run the new user growth and engagement team. During that time, he claims he learned the company was falsely representing itself in a number of ways.

The specific charges have been redacted from the complaint so the details will remain hidden, but Pompliano believes the company has been leading its investors astray with information about its growth. Snapchat reportedly filed for a $25 billion IPO late last year.

He also claims he was pressured to breach his nondisclosure agreements made with Facebook in order to share confidential and proprietary information from the social network company and believes Snapchat falsely represented itself to him in order to steal him away from Facebook. When he refused to share any information, he "drew the ire" of senior management at Snapchat, according to his account.

"Because the truth concerning Mr. Pompliano's termination was so potentially damaging to Snapchat's planned IPO, terminating him wasn't enough to ensure the public was kept in the dark," Pompliano's attorney David Michaels wrote in the complaint. "Accordingly, post-termination, Snapchat has sought to destroy his career and reputation by waging a smear campaign against Mr. Pompliano, by making false representations concerning the circumstances of his termination."

Pompliano—who filed the complaint in confidential arbitration per his agreement with Snapchat—is seeking an injunction to prevent his former employer from making any false claims regarding his termination from the company. He is also looking for exemplary damages.

In a statement to the Hollywood reporter, Snapchat's vice president of communications Mary Ritti said, "We've reviewed the complaint. It has no merit. It is totally made up by a disgruntled former employee."