Better Home Sues Founder Vishal Garg Over CEO Comeback Bid

Better Home & Finance has sued its founder, Vishal Garg, accusing him of launching what the company describes as a “scorched-earth campaign” to regain control after being removed as chief executive. The lawsuit brings renewed attention to Garg’s controversial leadership at the mortgage lender, including allegations from employees that he referred to staff as “mortgage monkeys” and “dumb dolphins.”

In a complaint filed Tuesday in the U.S. District Court for the Southern District of New York, Better Home alleges Garg violated two federal securities laws by building support among shareholders and distributing misleading information in an effort to return to the CEO position. The company is asking the court to invalidate shareholder approvals Garg obtained and block him from seeking additional shareholder support for at least 30 days.

Better Home’s board voted unanimously on Aug. 3 to remove Garg as CEO, with Garg excluded from the vote. The company cited cumulative net losses of more than $1.5 billion since 2022 and a decline of more than 90% in its stock price during Garg’s tenure, according to the complaint.

Following his removal, Garg allegedly began what Better Home characterized as a “campaign of retribution.” In a letter sent to the company’s board on Aug. 10, Garg called for the immediate resignation of every board member and said he had formed a “group of concerned shareholders” aimed at helping restore him as CEO, according to the lawsuit.

The company alleges Garg sought shareholder backing through press releases, text messages, social media activity and an interview with Bloomberg. Better Home claims Garg falsely stated during the interview that he had “already corralled 52%” of the shareholder vote, while failing to submit the proxy statements required by the Securities and Exchange Commission.

Garg’s public comments about the company’s new leadership have also changed since his departure. In Better Home’s announcement of his exit, Garg said that “now is the right time for new leadership” and expressed confidence that Daniel Lewis was the “right person to lead the company through this important time in its evolution.” Garg also posted on X that he was “looking forward to what the new CEO can do.” By Aug. 15, however, his position had shifted, with Garg alleging on X that “the only people who may have committed securities law violations are Daniel Lewis and the board.”

Garg founded Better Homes in 2016, and the mortgage company went on to process more than $110 billion in loans before becoming a publicly traded company through a SPAC merger in 2023. The business was backed by SoftBank and Goldman Sachs, but Garg’s leadership style became a recurring source of controversy among employees.

In 2020, Garg referred to employees as “dumb dolphins” in an email. The following year, he dismissed 900 employees during a Zoom video call and later described the workers as “lazy.” Employees cited in Better Home’s lawsuit have also alleged that Garg used the term “mortgage monkeys” when referring to his workforce.

An internal review into Garg’s conduct concluded that he had “failed to set a tone at the top that supported a strong culture of internal controls.” The review also found that the company had become “less effective than others in our industry at capturing potential customers.” Garg was placed on leave following the 2021 mass layoffs before returning to the CEO role in 2022.