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StartupLegal Dispute Emerges: Carta, Fintech Startup, and its Former CTO at Odds

Legal Dispute Emerges: Carta, Fintech Startup, and its Former CTO at Odds

The financial technology startup Carta is currently embroiled in a highly contentious legal dispute, as its former Chief Technology Officer, Jerry Talton, has filed a lawsuit against CEO Henry Ward, accusing him of misusing company resources. In a lawsuit submitted to the Manhattan federal court, Talton didn’t mince words, describing Ward as “charismatic, but insecure and narcissistic” and drawing a striking comparison to Don Corleone from The Godfather.

This countersuit is a direct response to Carta’s prior legal action against Talton, wherein the company accused him of secretly recording conversations with executives, among other allegations. Talton contends that his termination and the accusations leveled against him by Carta are a form of retaliation, stemming from his efforts to bring concerns about the company to the attention of its board.

Carta, a company known for providing services to manage investor information, recently faced public scrutiny when a customer alleged that the company misused information to bolster its secondary markets division. In response to the public outcry, Ward publicly apologized, prompting Carta to swiftly exit the secondary stock sale business, with Ward acknowledging this move as his “greatest failure.” Despite being valued at $7.4 billion by investors, Carta has found itself in an unusual level of drama for a financial software entity.

Talton’s complaint goes beyond the personal feud and touches on broader issues within Carta. He alleges a pervasive pattern of discrimination against women within the company. According to Talton, Ward directed Carta to procure products from companies in which he had invested, rather than seeking the best providers. Talton claims that Ward asserted, “I am the company!” and informed Carta’s human resources director that her role was not to protect the company.

Carta has faced legal challenges in the past, including a 2020 lawsuit regarding unequal pay for women, which was settled last year. Additionally, a suit filed in 2021 by a former executive accused Ward of aggressive and demeaning behavior after reporting sexual harassment by a colleague. Both Carta and the accused former colleague denied the claims.

While Carta has not immediately responded to the recent allegations, a lawyer representing the company, in a letter seeking redactions to Talton’s suit, claimed that the former CTO was motivated by “private spite” against Carta and Ward. The unfolding legal saga adds another layer of complexity to Carta’s already tumultuous recent history.

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