SoftBank Sues Former IRL CEO For Fraud

SoftBank sued former IRL CEO Abraham Shafi and five siblings and cousins for allegedly misleading the investor about the messaging app's growth, prompting the Japanese conglomerate to buy $150 million worth of shares in the company in 2021 at the height of a pandemic-fueled consumer internet boom. The Information: SoftBank said Shafi and his family members defrauded investors by lying about the company's millions of users, which were actually bots. The lawsuit said the defendants deleted data and communications about the fraud after U.S. securities regulators began investigating the company following a report in The Information questioning the user figures. Last month, The Information reported the company was being shut down following an external investigation initiated by its board of directors that found 95% of its users were fake. The conduct described in the lawsuit, including allegedly deleting evidence during a federal investigation, could put Shafi in further legal trouble.

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