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Ousted Parler CEO sues company, alleges stake was taken

SAN FRANCISCO — The founder and former CEO of right-leaning social media site Parler is suing the company he created and its controlling owner, political megadonor Rebekah Mercer, alleging his ownership stake was taken from him.

John Matze, who founded Parler in 2018 with funding from Mercer, filed the suit in Nevada district court on Monday. Matze has said he was forced out of the company in early February, just weeks after Parler became embroiled in controversy surrounding the Jan. 6 attack on the U.S. Capitol, resulting in the site being knocked offline for more than a month.

The suit, which was announced in a news release by Matze’s attorneys and uploaded online by the Las Vegas Sun, names Parler, Mercer, interim CEO Mark Meckler and investors Jeffrey Wernick and Dan Bongino as defendants, as well as a corporation believed to be controlled by Mercer.

In the complaint, Matze alleges that Mercer and others plotted to steal Matze’s 40 percent stake in the company, later saying the fair market value for his stake was worth only $ 3. The “outlandish and arrogant theft” is “the product of a conspiratorial agreement,” the suit says.

Mercer, who backed former president Trump for president, owns the controlling stake in the company, and has now installed her allies to run Parler, according to people familiar with the matter who requested anonymity to speak candidly about private matters.

Parler executives, including Meckler and Wernick, did not respond to requests for comment. Mercer and Bongino did not respond to requests for comment. Law firm Pisanelli Bice said in a statement that Matze would not have further comment.

Matze says in the suit that Parler is being “hijacked” away from being the free expression site he first imagined. The suit alleges that Mercer “sought to co-opt” Parler to encourage her political views.

“It became apparent to Matze that Meckler’s efforts were not to grow Parler as a free expression platform, but instead to redirect it into what Meckler called as the ‘tip of the conservative spear’ for a brand of conservatism in keeping with Mercer’s preferences,” the lawsuit alleges.

Parler grew from a niche social media site to a relatively mainstream option in 2020 when prominent conservative politicians and pundits began joining and promoting the site, many saying they were fed up with so-called “censorship” on big social media sites Twitter and Facebook. Twitter had started labeling former president Trump’s tweets with fact checks, and Parler positioned itself as the “free-speech” alternative site.

After the election, Parler’s user base boomed to more than 10 million, bolstered by people seeking alternative social media sites as Trump and his allies spread false narratives about the veracity of the election.

Parler had about 15 million users before it was knocked offline in January, following reports that people had used the site to encourage the attack on the Capitol. Amazon, Apple and Google pulled their technical support for Parler, saying it was not moderating content robustly enough, effectively turning off the lights for the service.

(Amazon CEO Jeff Bezos owns The Washington Post).

Parler came back online more than a month later with a new cloud computing provider, Los Angeles-based SkySilk. In his suit, Matze claims he was the one who secured the new hosting provider and set up a version of the moderating system Parler is now using.

“However, as Meckler lacked the technical know-how to actually run such a social media platform — and his real role was to simply push a political agenda — the implementation was beyond lacking,” according to the suit.

Matze is seeking unspecified millions in damages.

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