A former SandboxAQ executive filed a wrongful termination lawsuit last month with scandalous allegations against the company’s famous CEO, Jack Hidary, that the plaintiffs themselves redacted the worst details.
On Friday, the company’s lawyers filed a scathing response, calling the former employee a “serial liar” and saying the lawsuit “asserts false claims for false and extortionate purposes.”
Even the visible portion of the lawsuit — obtained by TechCrunch — contains eyebrow-raising allegations, if the court finds them true. (A A copy of the lawsuit is available here.)
The case provides a rare look at how employee lawsuits can become a public airing of the dirty laundry of obscure internal incidents, thanks to private arbitration clauses that are ubiquitous in Silicon Valley employee agreements.
The lawsuit was filed by Robert Bender in mid-December. Bender worked as Chief of Staff for Hidary from August 2024 to July 2025, the complaint states. He contends he was wrongfully fired after raising concerns about a series of alleged incidents, some, he says, involving “sexual encounters” and others, he claims, involving misleading financial information to investors.
For its part, SandboxAQ denies the allegations. Corporate lawyer Orin Snyder, a well-known partner at the white shoe law firm Gibson Dunn, told TechCrunch: “This case is a complete fabrication. We expect to refute these baseless allegations and expose the lawsuit – as detailed in our answer – for what it is – an opportunistic and extortionate abuse of the judicial process.”
What makes the case especially 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’s 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 off from Alphabet to become an independent company in March 2022 with Hidary as CEO and soon attracted major investors, including billionaire and former Google CEO Eric Schmidt, who invested in 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 lawyer said other court documents that the redacted part “describes sexual encounters and physical conditions of non-party individuals observed by the Plaintiff during a business trip.” In other words, the alleged incident involved someone Bender was not sued for. This is an unusual step – usually, it is the party being sued who requests the redaction, not the person making the allegations.
There are various explanations for the tactic, and TechCrunch was unable to determine what the motivation was in this case. In general, the possibilities range from protecting innocent third parties who are not accused of wrongdoing, to shakedown strategies – signaling that more damaging details may emerge if the defendants do not offer an acceptable settlement.
An unsettled portion of the suit provides few general details about the undercover allegations: Bender said Hidary used company resources and investor funds to “solicit, transport, and entertain female friends.” Attached to the exhibit are text messages from Bender, in which he mentions prostitution.
Bender further alleges in the suit that Hidary sold tens of millions of dollars in shares at a premium based on what Bender says were misleading figures presented to potential investors. He contends in the suit that the revenue figures presented to the board were 50% lower than the figures shown in the presentations to potential investors.
SandboxAQ’s attorneys vigorously contest all of the above. “The company did not make fraudulent disclosures to investors regarding the tender offer or anything else. The CEO did not misuse the company’s assets. The plaintiff invented this inflammatory accusation to make a statutory claim and insulate himself from the consequences of his own wrongdoing.”
Bender, for his part, says the company is trying to destroy him. His complaint asserted that he had filed a lawsuit, “only because his deputation was followed by a vicious campaign to damage his reputation.”
While the validity of the allegations is for the jury to decide, many of the claims echo an investigative report on SandboxAQ published by Information in July.
Sources told The Information that Hidary used company resources to fly women he was courting on company jets, and that the company’s profits were far from projected. Bender referenced the Information story in the lawsuit but denied he was the source. SandboxAQ claimed he was the source and lied about his involvement. (A copy of SandboxAQ’s full company response, including other allegations about employees, is available meet here.)
Despite the controversy, large 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 too announced a $90 million secondary sale. SandboxAQ has raised a total of $1 billion, it saidand is worth $5.75 billion, according to PitchBook estimates.