Tinder Inc. founders Sean Rad, Justin Mateen and Jonathan Badeen, along with three current senior executives, are part of a group that filed a lawsuit against the dating app's owner IAC/InterActiveCorp and its subsidiary Match Group Inc, CNBC reported.
The plaintiffs, including early employees of Tinder, filed the suit on Aug. 14 in the New York State Supreme Court for at least $2 billion. The lawsuit accuses IAC and Match Group of robbing Tinder employees by falsifying financial information, "undermining Tinder's valuation and unlawfully stripping away their Tinder stock options."
The defendants allegedly manufactured a "lowball" valuation of Tinder and then "extinguished Tinder stock options entitling the employees to valuations in 2017, 2018, 2020 and 2021," allowing the defendants to pocket the money that should have been owed to the plaintiffs, the report said.
IAC and Match Group issued a statement in response to the accusations, saying, "The allegations in the complaint are meritless, and IAC and Match Group intend to vigorously defend against them."
"Since Tinder's inception, Match Group has paid out in excess of a billion dollars in equity compensation to Tinder's founders and employees. With respect to the matters alleged in the complaint, the facts are simple: Match Group and the plaintiffs went through a rigorous, contractually defined valuation process involving two independent global investment banks, and Mr. Rad and his merry band of plaintiffs did not like the outcome," the statement said.
The suit also alleges that the appointment of Greg Blatt, Match Group's former chairman and CEO, as interim chief executive of Tinder in December 2016 allowed the defendants to "control the valuation of Tinder" just as stock options for Tinder employees were set to be valued, according to the report.
Blatt is also accused in the suit of groping and sexually harassing Rosette Pambakian, Tinder's vice president of marketing and communications, at Tinder's 2016 holiday party in Los Angeles. Pambakian is a plaintiff in the lawsuit.