carta: Fintech startup Carta embroiled in legal drama with former CTO

Ex-CTO Jerry Talton accused chief executive officer Henry Ward in a suit filed Friday of misusing Carta resources and called Ward “charismatic, but insecure and narcissistic,” also comparing him to Don Corleone from The Godfather.

The filing in Manhattan federal court came in response to an earlier suit by Carta accusing Talton of secretly recording conversations with executives, among other claims.

In his countersuit, Talton said his firing and Carta’s claims against him were retaliation for bringing his concerns about the company to its board.

Carta has stirred an unusual level of drama for a financial software company. Thousands of Silicon Valley startups rely on its services helping to manage investor information, or cap tables. But earlier this month, a customer publicly complained that Carta misused that information to gin up business for its secondary markets division, sparking widespread outrage in the tech world.

Ward publicly apologized, and within days, Carta had exited the secondary stock sale business altogether, with the CEO calling it his “greatest failure.” The company was last valued by investors at $7.4 billion.

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A 2020 suit against the company by a former executive who alleged unequal pay for women settled last year for undisclosed terms. Carta also faces a suit filed last year by a former executive who said the CEO treated her in an aggressive and demeaning manner after she reported being sexually harassed by a male colleague. Carta and the former colleague have denied the claims.Talton alleged in his complaint that women routinely faced discrimination at the company and that Ward steered Carta to pay for products made by companies he had invested in, rather than finding the best providers. Talton also claimed that Ward told Carta’s human resources director, “The problem you and I are having is that you seem to think that your job is to protect the company,” and “I am the company!”

Carta had no immediate comment. In a letter requesting extensive redactions to Talton’s suit, a lawyer for Carta said the former CTO was attempting to “gratify private spite” toward Carta and Ward.

Business Insider previously reported Talton’s suit.

The case is eShares Inc. d/b/a/ Carta Inc. v. Talton, 22-cv-10987, US District Court, Southern District of New York (Manhattan).

Ex-CTO Jerry Talton accused chief executive officer Henry Ward in a suit filed Friday of misusing Carta resources and called Ward “charismatic, but insecure and narcissistic,” also comparing him to Don Corleone from The Godfather.

The filing in Manhattan federal court came in response to an earlier suit by Carta accusing Talton of secretly recording conversations with executives, among other claims.

In his countersuit, Talton said his firing and Carta’s claims against him were retaliation for bringing his concerns about the company to its board.

Carta has stirred an unusual level of drama for a financial software company. Thousands of Silicon Valley startups rely on its services helping to manage investor information, or cap tables. But earlier this month, a customer publicly complained that Carta misused that information to gin up business for its secondary markets division, sparking widespread outrage in the tech world.

Ward publicly apologized, and within days, Carta had exited the secondary stock sale business altogether, with the CEO calling it his “greatest failure.” The company was last valued by investors at $7.4 billion.

Discover the stories of your interest

A 2020 suit against the company by a former executive who alleged unequal pay for women settled last year for undisclosed terms. Carta also faces a suit filed last year by a former executive who said the CEO treated her in an aggressive and demeaning manner after she reported being sexually harassed by a male colleague. Carta and the former colleague have denied the claims.Talton alleged in his complaint that women routinely faced discrimination at the company and that Ward steered Carta to pay for products made by companies he had invested in, rather than finding the best providers. Talton also claimed that Ward told Carta’s human resources director, “The problem you and I are having is that you seem to think that your job is to protect the company,” and “I am the company!”

Carta had no immediate comment. In a letter requesting extensive redactions to Talton’s suit, a lawyer for Carta said the former CTO was attempting to “gratify private spite” toward Carta and Ward.

Business Insider previously reported Talton’s suit.

The case is eShares Inc. d/b/a/ Carta Inc. v. Talton, 22-cv-10987, US District Court, Southern District of New York (Manhattan).