Former CEO Zain Jaffer files wrongful termination lawsuit against Vungle

Published March 12, 2019

Vungle founder Zain Jaffer filed a lawsuit today accusing the mobile advertising company of wrongfully terminating him from the role of CEO.

The lawsuit cites a section of the California labor code that it says “expressly and specifically prohibits discrimination and retaliation by employers based upon an arrest or detention that did not result in conviction.”

Jaffer was arrested in October 2017 in an incident involving his young son — the charges included performing a lewd act on a child and assault with a deadly weapon. Last year, the charges were dropped, with the San Mateo District Attorney’s Office saying it did “not believe that there was any sexual conduct by Mr. Jaffer that evening,” while “the injuries were the result of Mr. Jaffer being in a state of unconsciousness caused by prescription medication.”

Afterwards, Jaffer began looking into either selling his Vungle shares or pursuing a leadership change at the company, something he alludes to in his statement on the suit:

Once I was absolved of any wrongdoing, I was looking forward to a friendly relationship with the Company. Instead, Vungle unfairly and unlawfully sought to destroy my career, blocked my efforts to sell my own shares or transfer shares to family members, and tried to prevent me from purchasing shares in the Company.

When reached by TechCrunch, a Vungle spokesperson declined to comment on the lawsuit.

The suit does not specify the amount that Jaffer is seeking, but his attorney Joann Rezzo reportedly told Bloomberg that he has suffered at least $100 million worth of harm. When asked about damages, Jaffer’s spokesperson sent us the following statement from Rezzo:

The amount to be awarded would be entirely within the discretion of the jury. My firm won almost $20M for an employee who asserted similar claims against Allstate Insurance Company. Mr. Jaffer’s potential recovery is much, much higher.

The suit she’s referring to involved a former Allstate employee who was awarded $18.6 million after he was fired following an arrest for domestic violence and possession of marijuana paraphernalia. All the charges were eventually dismissed.

You can read Jaffer’s full lawsuit below.

Jaffer v. Vungle Conformed … by on Scribd

Founder Zain Jaffer may be looking to take back control of Vungle

Published August 10, 2018

Zain Jaffer may be gearing up for a fight to take back control of Vungle, the mobile ad company he founded.

Jaffer was removed from his role as CEO last fall following his arrest on charges of assault with a deadly weapon and performing a lewd act on a child.

However, a San Mateo County judge subsequently dismissed the charges. The district attorney’s office released a statement offering more context for the dismissal, saying that they did not believe there was any sexual conduct on the evening in question, and that “the injuries were the result of Mr. Jaffer being in a state of unconsciousness caused by prescription medication.”

So what’s next for Jaffer and Vungle? There are hints in a recent letter from Jaffer’s attorney, John Pernick, which was sent to current Vungle CEO Rick Tallman.

TechCrunch has obtained a copy of the letter, which requests access to Vungle’s records, specifically the names and addresses of company shareholders. Pernick’s letter suggests that this could be a prelude to further action (emphasis added):

Mr. Jaffer is considering various options with respect to Vungle and his shares of Vungle. He has considered selling some portion of his Vungle shares. However, he is also considering pursuing a leadership change at Vungle through calling for a shareholders meeting for the purpose of voting on a new board of directors and/or purchasing shares of additional Vungle stock. Communicating with Vungle shareholders with respect to their interest in purchasing or selling Vungle stock or in a change in the board of directors is an entirely proper purpose for Mr. Jaffer’s request to inspect the shareholder information that will enable him to make these communications.

When TechCrunch contacted Pernick, he confirmed the authenticity of the letter but declined to comment further. A spokesperson for Jaffer also declined to comment, and Vungle did not respond to our inquiries.

As you can see in the quote above, the letter indicates that Jaffer is considering multiple courses of action.

But if he decides to pursue a leadership change at Vungle, either by winning over existing shareholders or by purchasing a controlling stake in the company, it sounds like there are investors willing to back him — for starters, Jun Hong Heng at Crescent Cove Capital Management confirmed that his firm is working with Jaffer.

“We think Zain and Vungle have incredible potential,” Heng said in a statement. “We look forward to working with Zain and giving him the support he needs to help him regain control of his company.”

We also reached out to Anne-Marie Roussel, who recently resigned from Vungle’s board of directors. Roussel said via email that “the Vungle controversy is an interesting proxy for a much larger debate: the fuzziness surrounding ethical conduct in the tech industry.”

She added, “My personal prediction is that boards of tech companies will be held increasingly accountable for the ethics of the key decisions they make.” As for how that applies to Vungle, she said:

How does it reflect on ethical values when a CEO is dismissed based on presumption of guilt? Don’t we live in a democracy where one of the key legal right is “presumption of innocence” (as in a defendant is innocent until proven guilty). Upholding that principle by collaborating with his defense team was what led to my resignation from Vungle’s board.

Letter to Vungle by TechCrunch on Scribd

All charges against ex-Vungle CEO Zain Jaffer, including lewd act on a child, dismissed by judge

Published July 3, 2018

All charges against former Vungle CEO Zain Jaffer, including sexual abuse of a child, have been dropped. According to a statement from Jaffer’s representatives, San Mateo County Judge Stephanie Garratt dismissed the charges today. Jaffer was arrested last October and charged with several serious offenses, including a lewd act on one of his children, child abuse and battery on a police officer.

The dismissal is confirmed by San Mateo County Superior Court’s online records. The case (number 17NF012415A) had been scheduled to go to jury trial in late August.

Jaffer, whose full name is Zainali Jaffer, said in a statement that:

Being wrongfully accused of these crimes has been a terrible experience, which has had a deep and lasting impact on my family and the employees of my business. Those closest to me knew I was innocent and were confident that all of the charges against me would eventually be dismissed. I want to thank the San Mateo County District Attorney’s Office for carefully reviewing and considering all of the information and evidence in this case and dropping all the charges. I am also incredibly grateful for the continued and unwavering support of my wife and family, and look forward to spending some quality time with them.

Vungle, the fast-rising mobile ad startup Jaffer co-founded in 2011, removed him from the company immediately after they learned about the charges in October. TechCrunch has contacted Vungle and the San Mateo County District Attorney’s Office for comment.