According to HousingWire, Better Home & Finance Holding Co. has taken legal action against its founder and former CEO Vishal Garg, filing a lawsuit in federal court that alleges he violated securities regulations. The company claims Garg has been orchestrating what they describe as an aggressive campaign to regain control by organizing shareholders behind the scenes without making the proper public disclosures that securities law requires. Better's board has characterized this effort as a "scorched-earth campaign" designed to remove current directors and reinstall Garg as CEO.
The legal dispute escalated after Better announced in early August that Daniel Lewis would take over as interim CEO following a mutual agreement with Garg. Just days later, Garg announced he had secured shareholder support representing a majority voting stake and intended to retake the company. Better's board responded by pointing to significant financial troubles during Garg's tenure, including over one and a half billion dollars in net losses since 2022 and a dramatic decline in the company's stock price.
Better's lawsuit specifically alleges that Garg violated federal securities laws by assembling a shareholder group that acted in concert without timely disclosure of its formation and membership. The company claims to have evidence that Garg coordinated with multiple parties including Steven Sarracino, Tony Bobulinski, and others to push his agenda. Better also contends that Garg made misleading public statements about his level of shareholder support before filing required disclosure documents with regulators.
The company alleges additional violations related to Garg's communications with shareholders, saying he solicited their support without first filing the proper proxy statement forms as federal law mandates. Better notes that when Garg finally did file disclosure documents on August 17th, they revealed his group controlled only about thirteen and seven-tenths percent of shares, which the company says directly contradicts his public claims of having majority support.
In its lawsuit, Better is asking the court for several remedies including an order requiring Garg to file complete and accurate disclosure documents, corrective statements to shareholders about allegedly false claims, and a ban on further shareholder solicitation until proper filings are submitted. Perhaps most significantly, Better is seeking to have any shareholder consents or support pledges obtained through what it views as improper solicitation completely invalidated.
What I'm seeing locally and throughout the Bay Area is that lending disruptions at major players like Better have created real opportunities for other mortgage professionals. When companies face internal turmoil like this, borrowers get nervous and shop around, which frankly helps established brokers build relationships with people who might otherwise have stayed with one lender. For buyers and sellers in our market, stability in your financing partner matters enormously, and situations like this remind folks why working with someone grounded in the local community can be valuable.
