Greg Blatt, former CEO of Tinder, was accused of sexually assaulting a female employee at a holiday party in December 2016, but new explosive court documents allege just how far company executives – including billionaire media mogul Barry Diller – were willing to go to cover it up.
When Tinder co-founder Sean Rad reported the allegation about Blatt to a company lawyer, Blatt accused him of ‘trying to burn down the house,’ believing the incident would damage an imminent public offering of the dating app.
Diller, whose company IAC had taken over Tinder, ‘threatened to go after [Rad] for everything he has, his parents have, and anyone he knows has,’ if he pursued the matter, according to court papers filed Wednesday by Rad and former colleagues at Tinder.
The coverup of the assault was all part of a plan to keep Blatt, ‘a longtime right-hand to Barry Diller,’ in place so he could execute a scheme to lowball Tinder’s value and in the process cheat employees out of billions of dollars in stock options, the papers allege.
He replaced Rad as CEO. Rad along with other founders of Tinder, current executives and some of its employees filed the lawsuit in 2018 against Tinder’s corporate parents, Match Group and Diller’s IAC.
New explosive court documents allege billionaire media mogul Barry Diller (left) tried to cover up sexual assault allegations against his ‘right-hand’ Greg Blatt (right). Blatt, former CEO of Tinder, was accused of sexually assaulting a female employee at a holiday party in December 2016
Diller ‘threatened to go after [Sean Rad] (pictured)for everything he has, his parents have, and anyone he knows has,’ if he pursued the matter, according to court papers
The New York Supreme Court case is expected to go to trial in November but on May 14, the defendants filed papers trying to exclude evidence about their investigation of Blatt.
‘Defendants do not want the jury to learn that on the eve of the 2017 valuation, the Match Board was confronted with explosive allegations that Blatt – the architect and master of their scheme to corrupt the valuation and deprive plaintiffs of billions of dollars – had sexually assaulted a subordinate at Tinder’s 2016 holiday party,’ the papers state.
Rosette Pambakian, who was Head of Communications, claimed that Blatt barged into a hotel room after a 2016 holiday party and began ‘forcibly groping [her] breasts and upper thighs, and kissing her shoulders, neck and chest’
‘Defendants know that if the jury sees the evidence that their investigation of Blatt was a sham and a whitewash – that the investigation was so egregiously deficient compared to how companies normally handle these situations – the jury will conduct that defendants’ motive was to protect Blatt, to keep him in place, and to ensure that he remained at the controls to executive defendants’ corrupt scheme by engineering a lowball valuation.’
At the end of 2016, Tinder was one of the fastest growing tech companies in the world, and Tinder employees had a right to sell stock options at a value set by Tinder’s 2017 valuation.
Blatt was installed as interim CEO on December 8, 2016, replacing Rad who became chairman. He was the architect of a ‘corrupt scheme’ to undervalue Tinder, the defendants claim.
‘His mission was to deny the banks performing the valuation the information they needed to make a fair and accurate assessment,’ the plaintiff’s state in Wednesday’s filing.
‘By withholding financial information and internal projections that would establish Tinder’s true value, Blatt would corrupt the process by leading the banks to radically undervalue Tinder and deny Plaintiffs and other Tinder employees the billions of dollars they had earned.’
The day after Blatt’s appointment, a ‘shocking event’ threatened to upend the plans, the papers allege. Tinder held a company party at the SLS Hotel in Los Angeles.
At 2 am, Blatt joined a female executive and two other employees in a hotel room and made the unwelcome advance, ‘climbed on top of (her) and was groping her breasts and in between her thighs as he kissed her arm, shoulder and neck,’ the papers allege.
The following Monday, Blatt met with the alleged victim and other employees who were there and apologized, while asking them to keep quiet about it.
‘If the Match Board fired Blatt, or even suspended him temporarily, a new CEO would step into his shoes and take charge of conveying Tinder’s financial information to the valuing banks,’ the court papers allege.
‘That posed an unacceptable risk to Defendants, as there would be no assurance that a new CEO would continue down Blatt’s corrupt path. Blatt was a longtime and loyal subordinate of Barry Diller, the chairman of IAC who controlled the IAC family of companies, including Match and its subsidiary Tinder. If the new CEO were honest and gave the banks the information they needed for a fair and accurate valuation, it would cost Defendants billions.’
‘But Defendants could not simply ignore the allegations,’ the plaintiffs argue. ‘They decided to launch an investigation that was anything but an honest truth-seeking inquiry.
‘Quite the opposite—it was a sham and a whitewash designed to create the false appearance of a genuine investigation, when in reality its purpose was to keep Blatt in power and at the helm of the corrupt scheme, at least until the valuation was complete and Blatt could be let go. And that is precisely what happened.’
Court documents allege that the coverup was all part of a plan to keep Blatt in place so he could execute a scheme to lowball Tinder’s value
The valuation was completed in June 2017. Two weeks later, Blatt resigned.
The documents include Blatt’s draft resignation letter, in which he acknowledged the sexual assault allegation, apparently believing that Match was about to publicize the news.
How the Tinder battle began
Tinder co-founder Sean Rad along with other founders, executives and several employees filed a $2 billion lawsuit in 2018 against Tinder’s corporate parents, Match Group and Diller’s IAC, accusing them of reducing the value of Tinder in an effort to cheat them out of billions in stock options.
The filing includes an allegation that the company covered up a sexual assault allegation against acting CEO Greg Blatt so he could complete Tinder’s lowball valuation in 2017.
The defendants filed a motion May 13 asking the court to exclude evidence relating to the 2016 holiday office party, where Blatt allegedly barged into a hotel room and assaulted a female executive, Rosette Pambakian.
‘This is not an effort to try to ‘silence’ Pambakian and sweep her accusations under the rug,’ the defendants argue in the May 13 filing. ‘She is not bringing sexual harassment or assault claims in this case.’
The defendants point out that the alleged incident occurred months before the Tinder valuation process began, and that the facts remain in dispute.
‘But what’s not disputed is that the encounter was brief, that the two were fully clothed at all times, that there were two other Tinder employees in the room, and that Pambakian never said ‘stop’ or anything like it,’ the papers assert. ‘It’s also undisputed that no one in the room ever reported the matter to Match.’
Match board’s attention didn’t learn about the alleged incident until Rad reported it months later. Rad’s interest was in ‘targeting Blatt as the obstacle to the valuation he desired.’ According to the court filing, Rad days earlier messaged an outside adviser that he was ‘at war’ with Blatt and that, ‘We will destroy him. This is going to be the biggest lesson of his life. He will be a changed man… excited for him ‘
The motion also includes alleged excerpts of flattering messages Pambakian wrote Blatt long after the alleged assault. When he announced he was leaving the company, she assured Blatt, ‘You did well. If you didn’t know already, everyone has a lot of respect for you,’ the documents allege.
The defendants claim Pambakian only came forward with her accusation after she was paid a large sum of money to serve the interests of Rad and others who are seeking billions of dollars – a claim the plaintiffs dispute.
‘I would be remiss if I did not include in this farewell email an explanation of an incident referenced in Match Group’s announcement today regarding these management changes,’ he wrote, then proceeded to give his own version of events.
‘I was invited up to the hotel room of another female employee along with the female executive I had been flirting with and a male employee,’ he wrote in the unsent letter. ‘In the hotel room, we ordered room service. As we waited for room service, the four of us flopped down on the bed to wait.’ He described the alleged assault as the ‘most superficial of human contact,’ and later added, ‘I was invited to the room and had the number texted to me after the party. I should also point out that the snuggling and nuzzling was consensual.’
He described it merely as ‘poor judgement.’
‘I acknowledge that what I did was dumb, but I’m confident it was not the first dumb thing to happen at a holiday party, and was not as dumb as the requirement that is now leading to this explanation,’ he wrote.
‘I apologize to everyone who is embarrassed by this incident, most importantly my loving (and hopefully forgiving) wife and family.’
He said the allegation had nothing to do with his decision to quit.
That version, while included in the court file, was never actually sent to employees. Instead, employees received another version that omitted the allegation.
The new court filing also includes excerpts from Barry Diller’s deposition in the original lawsuit.
According to the papers, Diller testified that famed corporate lawyer Marty Lipton advised Match that ‘it had an obligation to disclose Blatt’s misconduct upon his resignation.’
Diller also allegedly testified that he and the late Jack Welch, former CEO of General Motors and longtime advisor to IAC and Diller, were ‘dissatisfied’ with Lipton’s advice. ‘Diller subsequently notified Welch that Lipton had ‘changed his opinion,’ noting, ‘Now we’re all right – protecting GB,’ the papers state.
‘Evidence concerning the sham investigation goes directly to the issue at the heart of this case: how Defendants, through Tinder CEO Blatt, corrupted the valuation by feeding the banks false information and withholding the information necessary for a fair and accurate assessment of Tinder’s value,’ the papers allege.
The plaintiffs claim there were written contracts between IAC and Match and Tinder employees, including founders Sean Rad, Justin Mateen and Jonathan Badeen. The contracts required Tinder to be valued on specific dates in 2017, 2018, 2020 and 2021 and that the workers be allowed to exercise their stock options and sell them to IAC and Match.
‘In private emails, Blatt and other Match executives valued Tinder in the range of $7.05 to $11.75 billion,’ Wednesday’s papers allege. The final report, issued in July 2017, valued Tinder at $3 billion.
‘The same day,’ the plaintiffs allege, ‘Defendants merged Tinder into Match, converted all outstanding Tinder options into Match options (at the corrupted valuation), and terminated the Tinder option contracts (and optionholders’ rights to future valuations in 2018, 2020, and 2021).’
The alleged victim, Rosette Pambakian, is no longer a plaintiff in the lawsuit, but she and three other former Tinder employees, who signed arbitration agreements, are pursing identical claims against IAC and Match in arbitration. That proceeding is scheduled for February 2022.
Rosette has a separate legal action against Blatt, IAC and Match for wrongful termination, sexual harassment and other related claims. That case has also been sent to arbitration.
Blatt, meanwhile, is pursuing his own lawsuit against Rad and Pambakian, a defamation case accusing Rad of setting out to destroy him for ‘interfering with the co-founder’s dreams of a lucrative, outsized payout.’ The filing states that Rad did this in part by recruiting Pambakian, who soon after publicly accused Blatt of sexual assault. That case is also pending.
A spokesperson for plaintiffs said: ‘Why is Match hiding the truth? Maybe along with the investigation notes, Match can turn over their company policy, which apparently permits the CEO to get drunk, make sexual advances towards and then grope a female executive in front of two other employees in a hotel. Let’s hope Match does a better job protecting users of their site than they do their employees.’
The documents include Blatt’s draft resignation letter, in which he acknowledged the sexual assault allegation, apparently believing that Match was about to publicize the news. ‘I would be remiss if I did not include in this farewell email an explanation of an incident referenced in Match Group’s announcement today regarding these management changes,’ he wrote, then proceeded to give his own version of events
IAC and Match issued statements to the media disputing the plaintiff’s latest claims, while defending their handling of the sex assault allegation.
IAC said: ‘The company has nothing to hide. We did prepare for exactly what came to pass: Sean Rad making scurrilous accusations, completely unsupported by even the alleged victim, in an attempt to harm the company and improperly benefit himself.
‘Greg Blatt was not asked by the board to resign. He had made the board aware of his planned departure as Match Group CEO well before the holiday party and more than six months before Sean Rad brought the holiday party to the company’s attention. Rad raised the matter at the time he was engaged in a valuation process in which he went to any length—using anyone in his path—in an attempt to create leverage.
‘The board, having concluded its investigation, determined that no violation of company policy occurred and there was no cause for Greg to resign, which is why there was no cause to disclose it. That determination, like many other issues facing a public company in the normal course of business, was made in consultation with outside counsel who, after a full assessment of the facts, determined that disclosing an allegation about a thoroughly investigated incident in which the individual involved did not claim that any harassment took place was unnecessary.
‘When faced with a hostile, vindictive former employee like Sean Rad, Match and IAC took appropriate steps to protect themselves and the interests of shareholders.’
Match Group said, ‘This is the latest attempt by Sean Rad and his entourage to obfuscate the truth, defame former colleagues and issue ludicrous public statements in a thinly veiled attempt to distort reality for undeserved financial gain. As our filings have alleged, Rad and his litigation funders have paid key witnesses, including Rosette Pambakian, an enormous amount of money for their testimony.
‘Rad also surreptitiously recorded his colleagues for years – which is illegal in the state of California – to create new narratives and manipulate the facts of this case. But the facts are clear: the sexual harassment claims have nothing to do with this lawsuit, which is a dispute about the valuation of Tinder.
‘Match Group’s former head of HR testified that an NDA related to this matter never existed. The company never asked anyone to sign an NDA and NDAs are not a part of our arbitration process. We look forward to having our day in court when Mr. Rad will have to present evidence, not just make up stories.’
Blatt released statement responding to Wednesday’s filing through his representative: ‘As I made clear in my defamation lawsuit, Rad and Pambakian are attempting to extort an unjustified payout in their lawsuit against Match by making false allegations against me.
‘Their claims have been repeatedly contradicted during discovery, both by sworn testimony from multiple third-party witnesses and contemporaneous documentary evidence. I am extremely confident I will be vindicated of the allegations against me.’
Tinder’s female co-founder sued the company for sexual misconduct
In 2014, Tinder quickly settled a sexual harassment suit brought against the company by one of the app’s co-founders.
Whitney Wolfe, then-24, was awarded an undisclosed amount of money after claiming she was harassed and forced out of the company when her romantic relationship with Chief Marketing Officer and co-founder Justin Mateen, then-28, soured.
In a series of vitriolic texts submitted as part of the lawsuit, Mateen accused his former lover of being ‘heartless,’ threatened to ‘s*** on’ a love rival, and berated her for ‘flirting’ and spending time with Muslim men, whom he referred to as ‘Muslim pigs.’
Whitney Wolfe, then-24, was awarded an undisclosed amount of money after claiming she was harassed and forced out of the company when her romantic relationship with Chief Marketing Officer and co-founder Justin Mateen, then-28, soured
In one text he even told Wolfe, ‘Ul regret acting this way once my tenderness for you wear off from ur behavior.’
In her complaint, Wolfe stated that Mateen subjected her to ‘horrendously sexist, racist, and otherwise inappropriate comments, emails and text messages.’
She was then, ultimately, fired by the company.
The torrent of abuse to which Wolfe alleged she was subjected to after ending her relationship with Mateen, which began in February 2013 and lasted until that December, exposed a culture among Tinder’s senior executive which went beyond ‘frat-like,’ according to her attorney.
Mateen was suspended in the wake of the allegations and is no longer with Tinder or IAC.
Wolfe had been seeking compensatory damages, including restitution, lost pay, and punitive damages, in her lawsuit.