Better Home & Finance Sues Founder Vishal Garg Over Reinstatement Bid

Better Home & Finance has filed a lawsuit in the U.S. Southern District of New York against its founder and former CEO, Vishal Garg, accusing him of conducting a "scorched-earth campaign" to regain control of the company. The legal action alleges that Garg violated federal securities laws by misleading the market and soliciting shareholder support without filing required proxy statements with the Securities and Exchange Commission.

The conflict began on August 3, 2026, when the company's board unanimously removed Garg, citing losses exceeding $1.5 billion since 2022 and a valuation collapse from $8 billion to $300 million. The board appointed hedge fund manager Daniel Lewis as CEO, who had joined the board on July 27. Garg alleges that Lewis "hoodwinked" him by praising the company's strategy to gain board access before orchestrating his removal.

Represented by lawyer Alex Spiro, Garg demanded his reinstatement and the resignation of most board directors, offering to work for $1 a year until the company reaches profitability. He claimed the company had tripled loan volume through AI-driven processing and that he held sufficient voting power through Class B shares to reclaim control. Since Lewis took over, the company's stock has dropped an additional 45%.

In its lawsuit, Better Home & Finance highlighted Garg's history of workplace misconduct, including his 2021 firing of 900 employees via Zoom and allegations that he referred to staff as "monkeys" and "lazy." Garg has denied wrongdoing, asserting that the board and Lewis may have committed their own securities law violations.