Published: Thu, April 13, 2017
Hi-Tech | By Ellis Neal

Lawsuit Claims CEO Said App 'Only For Rich People'

Lawsuit Claims CEO Said App 'Only For Rich People'

He says that when he told Spiegel that the app wasn't performing as well as hoped and could better their growth in markets such as India and Spain, the CEO told him that the app was "only for rich people" and not for "poor countries".

The suit fixates on Pompliano's claim that Snapchat was giving financial specialists and promoters swelled measurements and false claims about the organization's month-to-month client development rate.

According to the lawsuit, Pompliano alleged that a group of top executives at Snap falsely represented to investors in an effort to inflate Snap's valuation, with the goal of taking the company public through an initial public offering.

During a September 2015 meeting with Pompliano and Snap executives, Spiegel allegedly said that it was "no big deal" that the company had inflated its DAUs. "In his latest dramatic installment, Pompliano doubles down on the main canard from his complaint - that Snap gave investors misstated user metrics back in 2015 - by asserting that Snap is now misleading investors".

Pompliano claimed that Snap solicited potential advertisers in mid-2015 by representing that the company had 100 million daily active users, while computer programs counted just 95 million to 97 million users.

Snap executives told unspecified individuals outside the company that 87% of users completed the app's registration process and that 40% of users kept using the app after a week. Pompliano says the figures were actually about 40% and about 20%, respectively.

Snap says it will prove the allegations to be false "at the appropriate time in the appropriate forum".

The former employee, Anthony Pompliano, first sued Snap in January, alleging that the company falsified its growth metrics.

In response to the allegations, Snap's attorneys have emphatically stated that the company "did not give investors misstated user metrics back in 2015, nor did Snap employees commit any of the panoply of alleged bad acts" Pompliano's complaint introduces. He's seeking a court order to bar Snap from misrepresenting the reasons for his firing when the company is called on by any of his prospective employers.

The ex-employee also claims he suggested growing the company's global numbers, particularly in areas that are highly active on social media.

Snapchat's CEO Evan Spiegel has been accused of saying his app "is only for rich people".

Some legal experts assert that Snap's move to unseal the documents voluntarily is a sign that the company agress some of the claims are true.

John Pierce, Pompliano's attorney, said he was encouraged that Snap "has come to its senses and belatedly agreed with us that the complaint in this case belongs in the public eye". "This attempt to save face by Snap should serve as a reminder that no matter how big you are (or how many billions of dollars you have) in our system everyone has to play by the same set of rules".

"Pompliano now resurfaces after three months of inactivity with new attorneys but the same publicity-hungry game plan", Snap's attorneys wrote. It's certainly possible, but as tends to be the case with lawsuits levied by employees, it's hard to draw any solid conclusions so early on. The company was under further pressure on Wednesday after Instagram released a new feature that lets users post disappearing photos and videos.

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