A former SandboxAQ executive filed a wrongful termination suit last month filled with such scandalous allegations against the company’s famed CEO, Jack Hidary, that the plaintiff himself redacted the most salacious details.
On Friday, the company’s lawyers filed a blistering response, calling the former employee a “serial liar” and stating his lawsuit “asserts false claims for improper and extortionate purposes.”
Even the visible portions of the lawsuit — which TechCrunch has obtained — contain eyebrow-raising allegations, should a court find them valid. (A copy of the lawsuit is available here.)
The case offers a rare inside look at how employee lawsuits can become a public airing of dirty laundry from otherwise opaque internal happenings, thanks to the ubiquitous private arbitration clauses in Silicon Valley employee agreements.
The suit was filed by Robert Bender in mid-December. Bender worked as Chief of Staff to Hidary from August 2024 through July 2025, the complaint states. He contends in his suit that he was wrongfully terminated after raising concerns about a number of alleged incidents, some of which, he said, involved “sexual encounters” and others, he claims, that involved misleading financial information presented to investors.
For its part, SandboxAQ vehemently denies the allegations. The company’s lawyer Orin Snyder, a well-known partner at white shoe law firm Gibson Dunn, tells TechCrunch: “This case is a complete fabrication. We look forward to debunking these baseless allegations and exposing the lawsuit — as detailed in our answer — for what it is — an opportunistic and extortionate abuse of the judicial process.”
What makes the case particularly notable is the number of Valley heavy hitters involved in SandboxAQ. The company is an AI quantum computing startup that began as a moonshot unit of Google parent company Alphabet, led at Google by Hidary. Hidary is also well-known in Silicon Valley as a longtime X Prize board member.
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SandboxAQ was spun out of Alphabet into an independent company in March 2022 with Hidary as CEO and soon 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 attorneys say in another court document that the redacted sections “describe sexual encounters and the physical condition of non-party individuals observed by Plaintiff during business travel.” In other words, the alleged incidents involve people who Bender is not suing. This is an unusual move — typically, it’s the party being sued that requests redactions, not the person making the allegations.
Various explanations exist for such a tactic, and TechCrunch couldn’t ascertain what the motivations are in this case. Generally speaking, the possibilities range from protecting innocent third parties who aren’t accused of wrongdoing, to a shakedown strategy — signaling that more damaging details could emerge if the defendants don’t offer an acceptable settlement.
The unredacted portion of the suit provides a few more general details of the allegations that were hidden: Bender is alleging that Hidary used company resources and investor funds to “solicit, transport, and entertain female companions.” In an attached exhibit of a text message from Bender, he mentions prostitutes.
Bender further alleges in his suit that Hidary sold tens of millions of dollars worth of his stock at a premium price based on what Bender says were misleading figures presented to potential investors. He contends in the suit that revenue figures presented to the board were 50% lower than the figures shown in presentations to prospective investors.
SandboxAQ’s lawyers vigorously contest all of the above. “The Company did not make fraudulent disclosures to investors regarding its tender offer or otherwise. The CEO did not misuse corporate assets. Plaintiff invented these inflammatory allegations to manufacture statutory claims and to insulate himself from the consequences of his own misconduct.”
Bender, for his part, alleges that the company has been trying to smear him. His complaint asserts that he brought his lawsuit, “only because his termination was followed by a malicious scorched earth campaign to destroy his reputation.”
While the validity of any of these allegations is for a jury to decide, many of his claims echo an investigative report on SandboxAQ published by The Information in July.
Sources told The Information that Hidary was using company resources to fly women he was dating on corporate jets, and that the company’s revenues were far below its projections. Bender references The Information story in his lawsuit but denies he was a source for it. SandboxAQ claims he was a source and is lying about his involvement. (A copy of SandboxAQ’s full corporate response, including more allegations about the employee, can be found here.)
Despite any controversies, big-name investors were eager 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 $1 billion total, it says, and is valued at $5.75 billion, according to PitchBook estimates.
Source: techcrunch.com
