While most tech-related lawsuits may be a little on the dry side for casual observers, the one laid at the door of Hyperloop One this week has all the makings of a racy Netflix original.
LA-based Hyperloop One is one of the companies at the forefront of efforts to turn Elon Musk’s dream of an ultra-high-speed transportation system into reality, though details of this surprising lawsuit suggest all is not well inside the firm.
Brought by company co-founder and recently resigned chief technology officer Brogan BamBrogan and three other plaintiffs, the suit accuses several senior Hyperloop One executives of turning the company into one “rife with nepotism,” and using their positions to “to augment their personal brands, enhance their romantic lives, and line their pockets (and those of their family members).”
One of the most remarkable accusations in the suit claims Hyperloop One’s chief legal officer, Afshin Pishevar, left a hangman’s noose on BamBrogan’s chair at Hyperloop One’s offices – the suit includes a photo (shown) of BamBrogan holding the noose at the center of the allegation.
BamBrogan suggests Afshin placed the noose on his chair because his brother Shervin, the company’s executive chairman and another co-founder, had become “agitated” about BamBrogan’s failure to attend a meeting with a group of potential investors. “Hyperloop One’s security cameras captured it all,” the suit says. BamBrogan feared for his safety and consequently resigned.
The legal action, filed on Tuesday in the Superior Court of California, also says the defendants “wasted the company’s precious cash,” citing a time when Hyperloop One raised the monthly salary of its PR vendor from $15,000 to $40,000 soon after Shervin Pishevar started dating her. “When their subsequent wedding engagement fell through, he finally heeded suggestions that her work was worth little, and terminated the arrangement,” the suit says.
Another allegation accuses Shervin of “pressuring” potential investors to invest in his venture capital firm, Sherpa Capital, in order to gain access to direct investment in Hyperloop One. The suit claims Shervin also “commanded that personal buddies be allowed to invest while strategic and other reputable investors were pushed off.”
Suggesting Hyperloop One isn’t making the most of its talent, the suit says those with the expertise to bring the transportation technology to fruition “have been systematically marginalized, while the ‘money men’ who do not understand the technology spent little time seeking to understand its potential, focusing on puffery – turning the company into a marketing-driven exercise, instead of the engineering-driven enterprise it should be.”
Apparently alarmed by the way the company was being managed, 11 employees – several of whom later filed the suit – wrote a letter to Pishevar and his team outlining their concerns and suggesting ways to move forward more effectively. However, after receiving the letter, the defendants “reacted swiftly, seeking to divide-and-conquer the group of eleven employees, and ensure defendants’ continued control.”
The complaints listed in the lawsuit were described as “just the tip of the iceberg,” accusing the defendants of abusing “their control of the company in myriad ways.”
“Unfortunate and delusional”
Responding to the legal action, Hyperloop One legal representative Orin Synder described the lawsuit in no uncertain terms, calling it “unfortunate and delusional.”
The lawyer said the BamBrogan and others “tried to stage a coup and failed.” adding, “The claims are pure nonsense and will be met with a swift and potent legal response.”
“Frivolous lawsuits like this one have become all too common against start-ups that achieve breakthrough success,” Synder said. “Hyperloop is on track, its board and team are united and today’s bogus lawsuit will have no impact on its goal of becoming the first company to bring the Hyperloop to the world.”