Carta, a 10-year-old San Francisco software firm providing investors with portfolio tracking tools, has filed suit against its former CTO Jerry Talton. Talton was dismissed “for cause” on December 23rd.
Carta is suing Talton for damages, alleging he abused his executive role by committing wrongful and illegal acts, betraying the company, and sexually harassing its employees—despite being lavishly compensated with a salary of hundreds of thousands of dollars plus equity awards.
Carta accuses a would-be whistleblower of using illegal tactics, implying it’s throwing the kitchen sink at them.
In October of last year, Talton was put on administrative leave after submitting a letter to Carta’s board of directors highlighting various issues with the company’s culture.
Carta said Talton’s leave was to enable an independent investigation, but they discovered he had secretly taped meetings with their general counsel. According to the complaint, during a confidential mediation (not involving Talton) on November 8, 2022, Lindauer was copied on an email from him containing a transcript of their September 27 conversation and evidence it had been uploaded to Dropbox.
I made a mistake. I forgot to put the sugar in my coffee this morning.
Oops! I forgot to sweeten my coffee – sugarless this morning.
Carta demanded Talton return recordings, transcripts, and other property to them while providing copies of all recordings and transcripts to approved investigators.
Talton rejected Carta’s allegation that he surreptitiously recorded its Board of Directors, Founder/CEO, and other executives and employees.
We contacted Carta and Talton this evening for comment, but they had not responded by publication.
Carta cofounder and CEO Henry Ward is temporarily serving as CTO until the position is filled, a spokesperson confirmed to the San Francisco Business Times.
It looks as though the suit could harm both sides.
Carta accuses Talton of both sending and receiving inappropriate messages with nine women, during work hours and on Carta systems. Additionally, he allegedly misused his corporate credit card for personal matters and attempted to book travel outside company policy in order to gain benefits not due him.
Talton has a history of success in software engineering and management: he holds a PhD in computer science from Stanford and two degrees from the University of Illinois at Urbana-Champaign. Prior to joining Carta as CTO in 2020, Talton co-founded an NEA/Andreessen funded software startup (now closed) and spent time as an engineering manager at Slack and research scientist at Intel.
Carta has faced criticism for its “culture” issues: in 2020, the company’s former VP of marketing brought a lawsuit against Carta, alleging gender discrimination, retaliation, wrongful termination and violations of California’s Equal Pay Act. (Read more about this case here.)
Carta’s new lawsuit against Talton has raised questions about a former employee, and several customers have voiced their dissatisfaction with Carta to TechGround. A fund manager transitioning off the platform said last week that his team had four different account managers in less than two years, which “certainly didn’t help with continuity and understanding of our fund and needs.”
The fund manager we interviewed last week complained of poor internal communication, citing it as if dealing with “four service providers.” She explained that Carta frequently asks for documents they should already have on file. Additionally, she noted the portal is insufficient and that tracking items shouldn’t be her responsibility despite paying for fund administration services.
Carta has raised a total of $1.1 billion from investors, as reported by Crunchbase. Their most recent round of funding, a $500 million Series G led by Silver Lake and valuing the company at $7.4 billion, was announced in August 2021.
Silver Lake has the backing of major investors such as Spark Capital, Social Capital, Menlo Ventures and Andreessen Horowitz.
Pictured: Henry Ward, cofounder and CEO of Carta (formerly eShares), alongside serial entrepreneur and investor Manu Kumar.
