Uber, Kalanick Sued by Investors for Scandal-Related LossesBy
Company chided for ‘disregard of the law’ in class-action case
Texas pension fund cites 15 percent decline in share value
Uber Technologies Inc. and former Chief Executive Officer Travis Kalanick were accused in a lawsuit of covering up a series of “illicit business tactics” while raising funds, leading to billions of dollars in losses for the ride-hailing giant’s investors.
The startup and its ex-CEO failed to reveal at least six instances of malfeasance while “successfully soliciting billions of dollars in private investment,” according to a complaint filed Tuesday as a class action in San Francisco federal court. A trade-secrets lawsuit by Waymo, a federal foreign bribery probe and fall-out from sexual harassment allegations are among the legal woes that have depressed shareholders’ investments in the company by 15 percent, according to the complaint.
“The company’s vaunted corporate culture was revealed to in truth consist of a toxic hotbed of misogyny, sexual discrimination, and disregard for the law that threatened the company’s reputation, business and prospects,” according to the complaint filed on behalf of a Texas city’s firefighter pension fund by Robbins Geller Rudman & Dowd LLP, one of the nation’s leading securities class-action firms.
The lawsuit adds to the wave of litigation against Uber that continues to spill over from the Kalanick regime onto newly appointed CEO Dara Khosrowshahi. Uber is in arbitration over a complaint filed by investors at Benchmark, which accused Kalanick of duping the firm to gain control of three board seats.
The “pervasive pattern of unlawful behavior” at Uber forced Kalanick to resign as CEO in June, resulting in an exodus of high-level employees at the company and “impairing its business, operations and prospects,” according to the complaint. Among those who’ve left Uber this year were the company’s president and the heads of business, communications, engineering and self-driving cars.
The case is Irving Firemen’s Relief & Retirement Fund v. Uber Technologies Inc., 17-cv-05558, U.S. District Court, Northern District of California (San Francisco).