A former SandboxAQ executive filed a wrongful termination lawsuit last month containing scandalous allegations against the company’s illustrious CEO Jack Hydary, with the plaintiff himself redacting the most salacious details.
The company’s lawyers issued a blistering rebuttal Friday, calling the former employee a “serial liar” and saying his lawsuit “alleges false claims for an unfair and outrageous purpose.”
Even the visible portion of the lawsuit, obtained by TechCrunch, contains claims that would raise eyebrows if a court deems them justified. (A copy of the lawsuit is available here.)
The case provides a valuable inside perspective on how employee litigation can become a public forum for the dirty laundry of opaque internal events, thanks to the ubiquitous private arbitration clauses in Silicon Valley employee agreements.
The lawsuit was filed in mid-December by Robert Bender. According to the complaint, Bender worked as Hidary’s chief of staff from August 2024 to July 2025. He alleges in his lawsuit that he was wrongfully terminated after raising concerns about a number of alleged incidents, some of which he claims involved “sexual contact” and others involving misleading financial information presented to investors.
Meanwhile, SandboxAQ vehemently denies the allegations. “This lawsuit is a complete fabrication, and we look forward to debunking these baseless allegations and exposing this lawsuit – as detailed in our response – to be an opportunistic and outrageous abuse of the judicial process,” Orin Snyder, a prominent partner at Whiteshoe law firm Gibson Dunn and an attorney for the firm, told TechCrunch.
What makes this case particularly noteworthy is the number of Valley’s biggest players involved in SandboxAQ. The company is an AI quantum computing startup that started as the Moonshot division of Google’s parent company, Alphabet, and is led by Hidary at Google. Mr. Hidary is also well-known in Silicon Valley for his years as a board member of the X Prize.
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SandboxAQ was spun out of Alphabet as an independent company in March 2022, with Hidary as CEO and quickly attracted big-name investors, including billionaire and former Google CEO Eric Schmidt, who invested and became the startup’s chairman. Other billionaire investors include Salesforce CEO Marc Benioff, venture capitalist Jim Breyer, and Bridgewater hedge fund founder Ray Dalio.
Bender’s attorney said in a separate court document that the redacted sections “describe sexual encounters and physical conditions of non-parties observed by Plaintiff during his business trips.” In other words, the alleged incident involves people the vendor is not suing. This is an unusual move. Usually, the person being sued is the party being sued, not the person making the complaint, who requests the edits.
There are many explanations for such tactics, but TechCrunch was unable to confirm the motive in this case. In general, the possibilities range from protecting innocent third parties not accused of wrongdoing to shakedown strategies that suggest more damaging details may emerge if the defendant does not offer an acceptable settlement.
An unredacted portion of the lawsuit provides some general details of the hidden allegations. Bender alleges that Hidary used company resources and investor funds to “recruit, transport, and entertain female companions.” In an attached exhibit of text messages from vendors, he mentions prostitutes.
Bender further alleges in the lawsuit that Hidary sold tens of millions of dollars worth of company stock at a premium based on what Bender contends were misleading numbers presented to potential investors. He alleges in his lawsuit that the revenue numbers presented to the board were 50% lower than those shown in presentations to prospective investors.
SandboxAQ’s attorneys are vigorously contesting all of the above. “The Company made no fraudulent disclosures to investors regarding the tender offer or otherwise. The CEO did not misuse corporate assets. Plaintiffs fabricated statutory claims and fabricated these inflammatory allegations to protect themselves from the consequences of their own wrongdoing.”
Bender claims the company was trying to smear him. His complaint alleges that he filed the lawsuit “because of the continued malicious scorched-earth campaign that defamed his reputation following his termination.”
The validity of these claims is for a jury to decide, but many of his claims echo an investigative report on SandboxAQ published in July by The Information.
People familiar with the matter told The Information that Hidary was using up company resources to put women he was dating on company jets, and the company’s revenue was far below expectations. Bender cites The Information article in his lawsuit, but denies that he is the source of the information. SandboxAQ claims he is the source and is lying about his involvement. (A copy of SandboxAQ’s full company response, including further allegations regarding employees, can be found here.)
Despite all the controversy, prominent investors were keen to invest in the company last year. In April, SandboxAQ raised over $450 million in a Series E funding round from Ray Dalio, Horizon Kinetics, BNP Paribas, Google, and Nvidia.
SandboxAQ also announced a $90 million secondary sale. SandboxAQ has raised a total of $1 billion and is valued at $5.75 billion, according to PitchBook estimates.
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