ALLEGEDLY SPEAKING

Sex, money, a hangman’s noose: This lawsuit against Hyperloop One has it all

A lawsuit filed Tuesday (July 12) against Hyperloop One, a startup designing futuristic, ultra-fast modes of transportation, is the stuff that HBO’s Silicon Valley is made on. Its pages are filled with allegations of nepotism, shady investment schemes, and threats made to employees. Also, photos of a hangman’s noose. (We’ll get there, keep reading.)

Hyperloop One “is being strangled by the mismanagement and greed of the venture capitalists who control the company,” the suit states. “Those in control of the company continually use the work of the team to augment their personal brands, enhance their romantic lives, and line their pockets (and those of their family members).”

The main plaintiff in the suit, filed in Superior Court of California, is Brogan BamBrogan, an early SpaceX employee, cofounder at Hyperloop One and, until recently, its chief technology officer. In mid-June, BamBrogan filed for a restraining order against Afshin Pishevar, Hyperloop’s former chief legal officer and brother to Hyperloop One cofounder Shervin Pishevar. The new lawsuit filing suggests why:

[On June 14] at 11:28 p.m. California time, Shervin’s brother and Chief Legal Officer of Hyperloop One, Defendant Afshin Pishevar, strolled through Hyperloop One’s office and placed a hangman’s noose on BamBrogan’s chair. Hyperloop One’s security cameras captured it all.

Here are the photos included in the court filing. The one on the left allegedly shows Afshin Pishevar “approaching … BamBrogan’s desk with a noose coiled in his left hand.” On the right, BamBrogan on June 15 “holding the hangman’s noose left on his chair.”

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(Court filings)

BamBrogan and his fellow plaintiffs, all former Hyperloop One employees, are suing the company, its CEO Robert Lloyd, both Pishevars, and Hyperloop One board member Joseph Lonsdale on counts that include wrongful termination, breach of contract, intentional infliction of emotional distress, assault, and breach of fiduciary duty. The plaintiffs have asked for the court to grant an injunction that would restrain the defendants from “publishing or otherwise disseminating any material that mentions or refers to Plaintiffs by name.” They also want a public apology, to be reinstated at the company, and a variety of damages in unspecified amounts.

“Today’s lawsuit brought by former employees of Hyperloop One is unfortunate and delusional. These employees tried to stage a coup and failed,” a lawyer for Hyperloop One told the Verge in a statement. “The claims are pure nonsense and will be met with a swift and potent legal response. Frivolous lawsuits like this one have become all too common against start-ups that achieve breakthrough success.”

Here are a few of the other more incendiary claims in the suit:

Shervin Pishevar, Hyperloop’s co-founder and investor, and managing director of Sherpa Capital, paid his girlfriend $40,000 a month to work as a publicist, then fired her once they broke up.

… from January 2015 through March 2016, Shervin Pishevar forced Hyperloop One to pay his girlfriend, and eventual fiancé, approximately $400,000 for “PR Services.” … Her $400,000 in compensation was far above market for services rendered by a PR firm, at a time when Hyperloop One’s employees were working at well-below market rates. … Despite repeated calls for her termination from the company’s executive team, Shervin refused. Only upon the breakup of their romantic relationship did Shervin allow Hyperloop One to terminate his paramour’s relationship with the company.

Shervin Pishevar pressured would-be Hyperloop One investors to put money into Sherpa Capital first.

Shervin instituted a “pay-to-play” scenario by pressuring potential Hyperloop One investors to invest in Shervin’s own fund, Sherpa Capital, in order to gain access to direct investment in Hyperloop One. He also commanded that personal buddies be allowed to invest while strategic and other reputable investors were pushed off.

Joseph Lonsdale, a Hyperloop One board member and founder of Palantir, forced Hyperloop One to hire his younger brother’s company to help with fundraising.

Defendants hired Fideras, a new company with no reputation or connections (other than the connections of Joe Lonsdale) despite a competing proposal from a top-tier investment bank to provide the same services for no fees, with the hope of securing future work from Hyperloop One.

You can read the full complaint below.

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