The CEO who fired 900 people on a Zoom call left Better on August 3. Two weeks later the company took him to federal court, alleging he broke securities law trying to get the job back.
Better Home & Finance sued its own founder on Tuesday.
The complaint, filed in the US District Court for the Southern District of New York, alleges that Vishal Garg violated two federal securities laws while campaigning to return as chief executive.
Garg has not been found liable for anything. This is a complaint, filed by one party, days old.
How Garg left in the first place
The exit was presented one way and later described another.
On August 3, Better announced that Garg was transitioning out of the CEO role and that board member Daniel Lewis would take over on an interim basis. The company said the two had mutually agreed. Garg said in the statement that Better was at an inflection point and that it was the right time for new leadership.
Lewis had joined the board on July 27, one week earlier. He founded the hedge fund Orange Capital and ran Ascend Fundraising Solutions from 2018 to 2023.
Better’s stock fell 7.6% in after-hours trading that day.
By August 13, the company’s account had changed. Better said it had fired Garg after he moved to oust the board, and connected him to a delayed 10-Q filing.
What each side is now saying
Garg told CNN he was fired on August 3, and that he had been misled about Lewis.
“He hoodwinked me,” Garg said. “He said he liked the company’s strategy. He praised us on X and used that to get on our board and win our confidences.”
On August 15, Garg posted that the only people who may have committed securities law violations were Lewis and the board.
Better’s complaint alleges the opposite, describing a scorched-earth campaign to regain control, and accusing Garg of cultivating a coalition of shareholders and flooding the market with misleading statements. The board voted unanimously, with Garg excluded, to remove him.
Both accounts cannot be right. A court will sort out which, and that takes considerably longer than two weeks.
Why people know his name
In December 2021, Garg laid off more than 900 employees on a single Zoom call, days before the holidays, and accused them of unproductivity in an anonymous post afterward. He apologized publicly.
Employees have alleged he referred to staff as “monkeys” and “dumb dolphins.” Those are allegations, and they are longstanding.
Garg founded the company in 2014 after a bad experience buying his first home. Better processed more than $110 billion in loans and went public through a SPAC merger in 2023, backed by SoftBank and Goldman Sachs.
Where the company actually stands
The financial picture is mixed rather than collapsing.
Preliminary second-quarter results reported alongside the leadership change showed funded loan volume of $1.67 billion and revenue of $54.7 million, both up year over year, against a net loss of $30.6 million. The company raised its annualized cost-reduction target past $45 million, up from $25 million.
The stock has been punished regardless, down around 40% over the thirty days following the announcement.
Garg still holds a seat on the board he is now being sued by. Nobody has explained how that arrangement is supposed to work.
Article compiled and edited by Derek Gibbs (entertainment editor) and the Clownfish TV newsroom.
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Hat Tips:
Forbes (August 18, 2026), Tyler Roush’s reporting on the complaint, the alleged securities violations, and the unanimous board vote
CNN (August 14, 2026), Garg’s own account of the removal and the “hoodwinked” quote
National Mortgage Professional (August 13 and 17, 2026), the shift from mutual transition to firing and the delayed 10-Q
HousingWire and Scotsman Guide (August 3, 2026), Lewis’s background and the preliminary Q2 figures