Strategic CIO // Team Building & Staffing
News
1/25/2013
07:01 PM
Connect Directly
Google+
LinkedIn
Twitter
RSS
E-Mail
50%
50%
Repost This

Square COO Resigns, Calls Harassment Claim A Shakedown

"I did not do the horrendous things I am told I may be accused of," insists Keith Rabois following resignation from mobile-payments company.

Technology entrepreneur Keith Rabois has resigned as chief operating officer of payment company Square in the face of possible legal action for sexual harassment.

At present, no legal claim has been filed, but Rabois says it has been threatened.

Square spokesman Ricardo Reyes in an emailed statement said that the first the company heard of these allegations was when it received the threat of a lawsuit two weeks ago.

"We took these allegations very seriously and we immediately launched a full investigation to ascertain the facts," Reyes said. "While we have not found evidence to support any claims, Keith exercised poor judgment that ultimately undermined his ability to remain an effective leader at Square. We accepted his resignation."

[ Learn why Starbucks invested $25 million into Square. Read Square, Starbucks Deal: Could Your Team Do It?. ]

In a blog post published Friday, Rabois recounted how in May 2010 he had met a man -- unidentified in his post-- through some mutual friends and entered into a relationship. He says that several weeks later he recommended that the man apply for a job at Square. The man was hired and started working at the company, though not under his supervision, according to Rabois.

Rabois says that recently a lawyer representing the man threatened Square and him with a lawsuit alleging that the relationship was not consensual, unless a payment of millions of dollars was made.

Acknowledging that allowing the relationship to continue once the man had joined the company was bad judgment, Rabois insisted that the relationship was consensual, Square was unaware of it, and the man never received special treatment because of the relationship. Rabois says he did not do the "horrendous things I am told I may be accused of."

Rabois characterized the possible lawsuit as "a shakedown" and vowed to defend himself under the law.

The attorney representing the other party, New York lawyer Steven Berger, could not be reached for comment.

In September, Square closed a $200 million Series D funding round, bringing its valuation to over $3.25 billion. Since September 2011, the company has grown from 150 employees to over 400.

Rabois said he resigned to minimize the distraction to Square and said he's working on another project about which he hopes to provide more information in February.

Sarah Friar, Square's CFO since last summer, will serve as acting COO for the time being.

Comment  | 
Print  | 
More Insights
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Government, May 2014
NIST's cyber-security framework gives critical-infrastructure operators a new tool to assess readiness. But will operators put this voluntary framework to work?
Video
Slideshows
Twitter Feed
Audio Interviews
Archived Audio Interviews
GE is a leader in combining connected devices and advanced analytics in pursuit of practical goals like less downtime, lower operating costs, and higher throughput. At GIO Power & Water, CIO Jim Fowler is part of the team exploring how to apply these techniques to some of the world's essential infrastructure, from power plants to water treatment systems. Join us, and bring your questions, as we talk about what's ahead.