Former executive sues startup’s CEO for buying Lamborghinis with company funds, feed racecar hobby

Facepalm: When a startup rises from the ashes of a failed tech venture, you’d hope the new founders learned some lessons. However, a fresh lawsuit against Osom Products, the company formed by ex-Essential employees after that company flopped, alleges that its CEO went on a personal spending spree using company money.

Osom’s former chief privacy officer, Mary Stone Ross, is taking legal action against the company and current CEO Jason Keats. The lawsuit alleges that Keats used company funds to buy himself two Lamborghinis. Other allegations in the filing include using corporate funds to pay his mortgage, booking countless first-class travel tickets, funding an expensive racing hobby, and paying his racing partner’s salary.

Ross also claims that a previous head of finance may have resigned over the affair, after which Keats replaced him with someone more sympathetic to his personal “financial needs.” She has asked the court to compel Osom to provide internal records.

However, it doesn’t end there. The lawsuit claims that Hewlett-Packard was exploring an acquisition of the company for a certain sum but pulled out of the deal when a price couldn’t be met. The filing states that Keats has depleted Osom’s resources and needs more capital to keep the company afloat.

An Osom spokesperson told Android Authority that the allegations in the lawsuit are “outlandish” and denied any wrongdoing by the company or Keats.

Osom launched to much hype and optimism only a few years ago. The founders were former Essential employees looking to build on that company’s principles after the company went under.

Osom teased its first product, the OV1 phone, in early 2022 as a privacy-centric handset costing around $1,000. A few months later, the OV1 was rebranded as the “Saga” thanks to a partnership with crypto platform Solana. The company described the Saga as a “Web3 smartphone” with software developed using Solana Mobile Stack (SMS) – an open-source toolkit for enabling native Android Web3 apps on the Solana platform. The partnership had Osom handling the hardware while Solana took care of the software.

Osom also produced a privacy-centered data cable featuring a Type-C plug with a switch that would disconnect any data-carrying wires. There were talks of a Saga Two phone, but that device never materialized.