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Human Capital: Doing away with the NDA – TechCrunch

You’ve landed on Human Capital, a weekly newsletter detailing the latest in diversity, equity, inclusion and labor. Sign up here to receive the newsletter every Friday at 1 p.m. PT. There’s some new legislation that hopes to prevent the use of non-disclosure agreements in workplace situations involving all forms of discrimination and harassment. That would […]

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You’ve landed on Human Capital, a weekly newsletter detailing the latest in diversity, equity, inclusion and labor. Sign up here to receive the newsletter every Friday at 1 p.m. PT.

There’s some new legislation that hopes to prevent the use of non-disclosure agreements in workplace situations involving all forms of discrimination and harassment. That would be huge for the tech industry, where NDAs have become commonplace in severance agreements.

Meanwhile, All Raise, Coursera and Niantic announced some new initiatives designed to increase diversity in tech.

I’ve also included an early look of a story I’m working on about the pipeline myth. Lots more to discuss so let’s get to it.

New legislation seeks to get rid of NDAs in cases of harassment or discrimination

Ifeoma Ozoma, a former Pinterest employee who alleged racial and gender discrimination at the company, is co-leading new legislation with California State Senator Connie Leyva and others to empower those who experience workplace discrimination and/or harassment. The Silenced No More Act (SB 331) would prevent the use of non-disclosure agreements in workplace situations involving all forms of discrimination and harassment.

“It was a legal gamble,” Ozoma told TechCrunch about coming forward with claims of both racial and gender discrimination, despite having signed an NDA. Pinterest could’ve decided to sue both Ozoma and Banks, Ozoma said, but that would’ve required the company to admit wrongdoing.

Meredith Whittaker, faculty director at AI Now and Google walkout co-organizer on SB 331

I also caught up with Whittaker, who said this type of legislation is absolutely necessary:

From a structural perspective, it’s really evident we’re not going to change toxic, discriminatory tech environments without naming the problems. We have decades of failed DEI PR, decades of people blaming the pipeline and decades of brilliant people like Ifeoma, Aerica and Timnit being harassed and pushed out of these environments. And oftentimes, people aren’t able to speak about their experiences so that the deep toxicity of these environments — the way it’s built into the structural operating procedures of these companies and workplaces — doesn’t get aired.

Musings on the pipeline problem

My conversation with Whittaker led to me being introduced to Dr. Joy Lisi Rankin, a research lead for gender, race and power in artificial intelligence at the AI Now Institute. She’s actively researching the history of the pipeline problem and took some time to chat with me about it. I’m not done with the story yet, but here’s a little teaser:

The very high-level view is, people have been talking about a pipeline problem in some form since the seventies,” Rankin told me. “And before that, often, it was like a quote, manpower problem, by focusing on who has PhDs or master’s degrees in a field or who has elite jobs in a field. But that focus is always on individuals. It’s on tracking people, not institutions and not structures. So this is why I think it continues to be a convenient excuse for a host of sins, because talking about a pipeline makes it seem as if all things are equal in the United States, and we just have to find a way to keep people in. But the truth is, when we think about a STEM pipeline, we don’t talk about the fact that education in the United States is by no means equal from birth onwards.

Ex-Salesforce manager alleges microaggressions and inequity

Cynthia Perry, a former design research senior manager at Salesforce who left earlier this month, posted her resignation letter on LinkedIn that detailed her negative treatment at the company. In it, Perry, a Black woman, alleges she experienced “countless microaggressions and inequity” during her time there.

Ultimately, Perry said she left her job because she had been “Gaslit, manipulated, bullied, neglected, and mostly unsupported” by folks she chose not to name.

Salesforce provided the following statement to TechCrunch:

For privacy reasons, we can’t comment on individual employee matters but Equality is one of our highest values and we have been dedicated to its advancement both inside and outside of our company since we were founded almost 22 years ago.

All Raise aims to increase diversity at the board level

Despite recent efforts to improve diversity at the board level, the number of Black, brown and women board members is still low. All Raise is looking to fix that with the recent launch of Board Xcelerate. Already, its 90-day search process has resulted in the placement of five independent board members.

Here’s the gist of the program:

We start by talking with investors, talent partners, and CEOs who want to fill their open independent board seats. Then, we kick off a fast, 90-day closed search process through a pool of talent sourced from our own network and an external advisory committee, supported and executed by a retained executive search firm. Finally, we connect the companies and candidates to interview and determine the best fit.

Coursera makes some Black History Month commitments

Ed tech company Coursera partnered with Howard University, a historically Black university, to beef up its social justice content on the online platform. Coursera also partnered with Facebook to provide scholarships to Black folks who would like to learn more about social media marketing. Lastly, Coursera partnered with non-profit Black Girls Code to offer up to 2,000 young Black girls free access to the Coursera catalog.

Niantic launches Black Developers Initiative

Niantic, the augmented reality company behind Pokemon Go, launched a new initiative to fund new projects from Black game developers. The Black Developers Initiative aims to not only fund those projects, but also offer resources and mentorship to Black game and AR developers.

Alphabet Workers Union has its first win

Last week, AWU filed a complaint with the NLRB alleging Google contract workers were silenced about pay and that the company fired a worker for speaking out about it. Now, the worker in question, Shannon Wait, is back at work.

“Shannon’s back at work b/c she had a union to turn to when she was illegally suspended,” AWU said in a tweet. “She came to us, we raised hell, & a week later, she’s back.”

Amazon warehouse worker union vote begins

Earlier this week, Amazon warehouse workers in Bessemer, Alabama began voting to decide whether or not they will unionize with the Retail, Wholesale and Department Store Union. The beginning of the vote came shortly after the National Labor Relations Board rejected Amazon’s attempt to delay the vote.

By unionizing, Amazon workers hope to gain the right to collectively bargain over their working conditions, like safety standards, pay, breaks and other issues. Unionizing would also enable workers to potentially become “just cause” employees versus at-will, depending on how the negotiations go.

Mail-in voting ends March 29, with the NLRB set to begin counting ballots the following day on a virtual platform.

The latest in Prop 22 battles

Despite the CA Supreme Court rejecting to hear the lawsuit challenging Prop 22’s constitutionality, the Service Employees International Union filed a similar suit in a lower court, the Alameda County Superior Court.

Meanwhile, the CA Supreme Court rejected Uber and Lyft’s request for it to review a lower court’s decision about whether they misclassified their drivers as independent contractors. The decision in question stated that drivers should be classified as employees, but then Prop 22 passed and made it so, moving forward, Uber and Lyft are legally able to classify their drivers as independent contractors.

TechCrunch Sessions: Justice agenda is out!

We released the agenda for the upcoming Justice event on March 3. We’re pumped to be able to host Backstage Capital founder and Managing Partner Arlan Hamilton, Gig Workers Collective’s Vanessa Bain, Alphabet Workers Union Executive Chair Parul Koul, Color of Change President Rashad Robinson, Anti-Defamation League CEO Jonathan Greenblatt and others.

Tickets are just $5.

Ifeoma Ozoma, a former Pinterest employee who alleged racial and gender discrimination at the company, is co-leading new legislation with California State Senator Connie Leyva and others to empower those who experience workplace discrimination and/or harassment. The Silenced No More Act (SB 331) would prevent the use of non-disclosure agreements in workplace situations involving all forms of discrimination and harassment.

Source: https://techcrunch.com/2021/02/13/human-capital-doing-away-with-the-nda/

human-capital:-doing-away-with-the-nda-–-techcrunch

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South Korean antitrust regulator fines Google $177M for abusing market dominance – TechCrunch

The Korea Fair Trade Commission (KFTC) said on Tuesday it fined Google $177 million for abusing its market dominance in the Android operating system (OS) market. The U.S. tech company has restricted market competition by prohibiting local smartphone makers like Samsung Electronics and LG Electronics from customizing their Android OS, through Google’s anti-fragmentation agreements (AFA), […]

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The Korea Fair Trade Commission (KFTC) said on Tuesday it fined Google $177 million for abusing its market dominance in the Android operating system (OS) market.

The U.S. tech company has restricted market competition by prohibiting local smartphone makers like Samsung Electronics and LG Electronics from customizing their Android OS, through Google’s anti-fragmentation agreements (AFA), according to the antitrust regulator statement.

Under the AFA, smartphone developers are not allowed to install or develop “Android forks”, modified versions of Android.

The KFTC banned Google LLC, Google Asia Pacific and Google Korea from imposing local smartphone developers to sign the AFA and make changes on details about the existing version. The new measure in South Korea will be applied to not only mobiles devices but also other Android-powered smart devices including watches and TVs.

Android has spurred innovation among Korean mobile operator owners and software developers and that has led to a better user experience for Korean consumers, Google said in its statement. “The KFTC’s decision released today ignores these benefits, and will undermine the advantages enjoyed by consumers. Google intends to appeal the KFTC’s decision,” a spokesperson at Google said.

The commission has been investigating Google over the anti-competition practice in OS market since July 2016, a spokesperson at KFTC said.

Google’s global mobile OS market share excluding China has been increased to 97.7% in 2019 from 38% in 2010, as per KFTC’s announcement.

Google’s AFA has also limited to launch tech companies’ new devices like smart watches and TVs using the operating system (OS) including Samsung’s smart watch in 2013, LG Electronics’ LTE smart speaker in 2018 as well as Amazon’s smart TV in 2018.

South Korea’s watchdog is probing into three other cases including the Play Store app market, billing system and the advertisement market.

Meanwhile, South Korea’s “anti-Google law”, takes effect on 14 September, based on Korea Communications Commission’s press release.

In late August, South Korea passed a bill to curb global tech companies including Google and Apple from imposing their own proprietary in-app payment service and commissions on app developers.

Source: https://techcrunch.com/2021/09/14/south-korean-antitrust-regulator-fines-google-177m-for-abusing-market-dominance/

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The SEC and the DOJ just charged this startup founder with fraud, saying he lied to Tiger and others – TechCrunch

Today, both the U.S. Department of Justice and the Securities and Exchange Commission charged Manish Lachwani, cofounder of a mobile app testing company Headspin, with fraud. The SEC says he violated antifraud provisions, and the civil penalties it’s seeking include a permanent injunction, a conduct-based injunction, and to bar him for serving as a corporate […]

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Today, both the U.S. Department of Justice and the Securities and Exchange Commission charged Manish Lachwani, cofounder of a mobile app testing company Headspin, with fraud. The SEC says he violated antifraud provisions, and the civil penalties it’s seeking include a permanent injunction, a conduct-based injunction, and to bar him for serving as a corporate executive or board member.

The DOJ, which arrested Lachwani earlier, has accused him of one count of wire fraud and one count of securities fraud, and the associated penalties if he’s found guilty are are more harsh, including, for wire fraud, a maximum sentence of 20 years in prison and a fine of $250,000. If he’s found guilty of securities fraud, he faces a maximum sentence of 20 years in prison and a fine of $5,000,000.

Both the the SEC and the DOJ say Lachwani — who led the six-year-old company as CEO until May of last year — defrauded investors out of $80 million by falsely claiming that his company, Headspin, had “achieved strong and consistent growth in acquiring customers and generating revenue” when he was pitching its Series C round to potential backers.

By the SEC’s telling, his fabrications were designed to help secure the round at a so-called unicorn valuation. That apparent plan worked, too, with Palo Alto-based Headspin attracting coverage in Forbes in February of last year after Dell Technologies Capital, Iconiq Capital and Tiger Global provided the company with $60 million in Series C funding at a $1.16 billion valuation. Forbes reported at the time that the valuation was double the valuation investors assigned HeadSpin when it closed its Series B round in October 2018.

The SEC also says that Lachwani was looking to enrich himself, saying he did so “by selling $2.5 million of his HeadSpin shares in a fundraising round during which he made misrepresentations to an existing HeadSpin investor.” (It isn’t clear from its complaint whether the SEC is referring to the Series C or an earlier round.)

The DOJ’s federal complaint suggests that Lachwani’s alleged scheming dates back to at least November 2019, when the company was fundraising. It says it was then that the success of Palo Alto-based Headspin — which helps apps and devices work in different environments around the world – was being knowingly misrepresented to investors by Lachwani.

More specifically, the complaint alleges that “in materials and presentations to potential investors, Lachwani reported false revenue and overstated key financial metrics of the company. . . he maintained control over operations, sales, and record-keeping, including invoicing, and he was the final decision maker on what revenue was booked and included in the company’s financial records.”

In the investigation that led to the DOJ’s charges, the FBI discovered “multiple examples” of Lachwani “instructing employees to include revenue from potential customers that inquired but did not engage Headspin, from past customers who no longer did business with Headspin, and from existing customers whose business was far less than the reported revenue,” says the department.

How far off were these collective calculations? The complaint says that ultimately, Lachwani “provided investors false information that overstated Headspin’s annual recurring revenue . . . by approximately $51 to $55 million.”

According to the complaint, Lachwani’s fraud unraveled after the company’s board of directors conducted an internal investigation and revised HeadSpin’s valuation down from $1.1 billion to $300 million. Indeed, in August of last year, The Information reported that the company was planning to lower the value of its Series C stock by nearly 80%.

The outlet reported at the time that Lachwani had already been replaced by another executive. That person, according to LinkedIn, is Rajeev Butani, who joined Headspin as its chief sales officer around the time its Series C round was being announced in February of last year.

Nikesh Arora, a former SoftBank president, the current CEO and chairman of Palo Alto Networks helped lead the internal review as a then-director on the board of Headspin, said The Information.

The SEC says it’s investigation is continuing. Meanwhile, the DOJ notes in its announcement that “a complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.”

Either way, the outlook doesn’t look very promising right now for Lachwani, who, according to Forbes, previously sold a mobile cloud business to Google and wound up co-founding Headspin after Yahoo cofounder Jerry Yang introduced him to Brien Colwell, a former Palantir and Quora engineer was working at the time on a different startup.

Colwell remains with Headspin as its CTO. He has not been named in either the SEC or the DOJ’s complaints relating to Headspin.

The company itself, which says it has been cooperating with the government’s investigation, was also not charged.

Pictured above, left to right, Headspin founders Lachwani and Colwell.

The DOJ’s federal complaint suggests that Lachwani’s alleged scheming dates back to at least November 2019, when the company was fundraising. It says it was then that the success of Palo Alto-based Headspin — which helps apps and devices work in different environments around the world – was being knowingly misrepresented to investors by Lachwani.

Source: https://techcrunch.com/2021/08/25/the-sec-and-the-doj-just-charged-this-startup-ceo-with-fraud-saying-he-lied-to-tiger-and-others/

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Blockchain startup XREX gets $17M to make cross-border trade faster – TechCrunch

A substantial portion of the world’s trade is done in United States dollars, creating problems for businesses in countries with a dollar shortage. Blockchain startup XREX was launched to help cross-border businesses in emerging markets perform faster transactions with products like a payment escrow service and crypto-fiat exchange platform. The Taipei-headquartered company announced today it has […]

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Blockchain startup co-founders Winston Hsiao and Wayne Huang in front of the company's logo

XREX co-founders Winston Hsiao and Wayne Huang

A substantial portion of the world’s trade is done in United States dollars, creating problems for businesses in countries with a dollar shortage. Blockchain startup XREX was launched to help cross-border businesses in emerging markets perform faster transactions with products like a payment escrow service and crypto-fiat exchange platform.

The Taipei-headquartered company announced today it has raised $17 million in pre-Series A funding led by CDIB Capital Group. The oversubscribed round also included participation from SBI Investment (a subsidiary of SBI Holdings), Global Founders Capital, ThreeD Capital, E.Sun Venture Capital, Systex Corporation, MetaPlanet Holdings, AppWorks, BlackMarble, New Economy Ventures and Seraph Group. XREX’s last funding was a $7 million seed round in 2019.

Part of the new round will be use to apply for financial licenses in Singapore, Hong Kong and South Africa, and partner with banks and financial institutions, like payment gateways.

“We specifically wanted to build a regulatory-friendly cap table,” XREX co-founder and chief executive officer Wayne Huang told TechCrunch. “It’s really hard for a startup like us to raise from banks and public companies, but as you can see, this round we deliberately to do that and we were successful.”

Huang sold his previous startup, anti-malware SaaS developer Armorize Technologies, to Proofpoint in 2013. Armorize analyzed source code to find vulnerabilities, and many of its clients were developers in Bangalore and Chennai, so Huang spent a lot of time traveling there.

“We ran into all sorts of cross-border money transfer issues. It seemed almost unstoppable,” Huang said. “Growing up in the U.S. and then in Taiwan, we were not exposed to those issues. So that planted a seed, and then when Satoshi [Nakamoto] published the bitcoin white paper, of course that was a big thing for all cybersecurity experts.”

He began thinking of how blockchain can support financial inclusion in emerging markets like India. The idea came to fruition Huang teamed up with XREX co-founder Winston Hsiao, the founder of BTCEx-TW, one of Taiwan’s first bitcoin exchanges. Hsiao grew up in India and founded Verico International, exporting Taiwan-manufactured semiconductors and electronics to other countries, so he was also familiar with cross-border trade issues.

XREX Crypto Services give merchants, especially those in countries with low U.S. dollar liquidity, tools to conduct trade in digital fiat currencies. “They have to get quick access to the U.S. dollar and be able to pay it out quick enough for them to secure important commodities that they want to import, and that’s the problem we want to solve,” said Huang.

To use the platform, merchants and their customers sign up for XREX’s wallet, which includes a commercial escrow service called Bitcheck. Huang said it is similar to having a standby letter of credit from a commercial bank, because buyers can use it to guarantee they will be able to make payments. Bitcheck uses digital currencies like USDT and USDC, stablecoins that are pegged to the U.S. dollar.

Merchants pay stablecoin to suppliers and XREX escrows the funds until the supplier provides proof of shipment, at which point it moves the payment to them. XREX’s crypto-fiat exchange allows users to convert USDT and USDC to U.S. dollars, which they can also withdraw and deposit through the platform.

Part of XREX’s funding will be used to expand its fiat currency platform, though Huang said it doesn’t plan to add too many cryptocurrencies “because we’re not built for crypto traders, we’re built for businesses and brand really matters to them. Brand and compliance, so whatever the U.S. Comptroller of the Currency says is a good stablecoin is what they’re going to use.”

Some of XREX’s partners include compliance and anti-money laundering providers like CipherTrace, Sum&Substance and TRISA. Part of XREX’s funding will be used to expand its security and compliance features, including Public Profiles, which are mandatory for customers, and user Reputation Index to increase transparency.

In a statement about the funding, CDIB Capital Innovation Fund head Ryan Kuo said, “CDIB was an early investor in XREX. After witnessing the company’s fast revenue growth and their commitment to compliance, we were determined to double our investment and lead this strategic round.”

The Taipei-headquartered company announced today it has raised $17 million in pre-Series A funding led by CDIB Capital Group. The oversubscribed round also included participation from SBI Investment (a subsidiary of SBI Holdings), Global Founders Capital, ThreeD Capital, E.Sun Venture Capital, Systex Corporation, MetaPlanet Holdings, AppWorks, BlackMarble, New Economy Ventures and Seraph Group. XREX’s last funding was a $7 million seed round in 2019.

Source: https://techcrunch.com/2021/08/22/blockchain-startup-xrex-gets-17m-to-make-cross-border-trade-faster/

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