Business Administration

Case Studies
Madison Williams
5/1/23

Snapchat : Full Disclosure Case

Anthony Pompliano, a former Snapchat employee, brings Snapchat to court claiming
they are misleading investors through inaccurate reporting. Their usage of reporting programs
called Flurry and Blizzard inaccurately count the amount of daily active users. This provides
investors with false information which could lead to people investing money and having
incredible loss. Pompliano claims he was previously fired for bringing this issue to light.
Snapchat rejected the claim stating that there is not enough information to back it up and
that Anthony Pompliano was simply angry at the company for the loss of his job. He had said
that Snapchat lied to him about important financial information, breach Facebook's confidential
information, and misled investors. He also claims that Snapchat is covering up the reason they
chose to fire him. Still, Snapchat states these claims are irrational.
Anthony Pompliano was fired in 2015, only three weeks after starting as head of growth
at Snapchat. He filed the case at hand in January of 2017. The time of the lawsuit was
incredibly inconvenient for the company as they were working towards their IPO so having
investors questioning whether the information they were reporting was accurate or not would be
a great damper on the company. They continued to claim the case was insane, bringing up the
fact that the ex-employee had done a similar thing to another business before.
In the end, the court ruled that the claims made by Pompliano were covered under his
contract. He tried to make the argument that the contract is void due to the fact that he did not
have an attorney and was made to sign it the same day he received it. It was decided that he
was sophisticated and aware enough to read, understand, and sign the contract. The case was
dismissed.

American Eagle : Non-consensual Promotional Communications

In 2015 American Eagle violated the Telephone Consumer Protection Act (TCPA) by
sending customers a promotional text message without their permission. Many people came
forward with complaints about receiving messages without giving the company their consent.
Some claimed that American Eagle had been violating the TCPA from 2010-2017.
The TCDA prohibits any business from contacting customers without their consent. The
only exceptions to this are nonprofit organizations, political campaigns, and those trying to
establish business relations. The act bans automated calls/texts and pre-recorded messages
without previous consent. It also prohibits any company from violating federal or internal
do-not-call lists. In some cases even dialing the wrong number can get a business into trouble.
As more people came forward and submitted claim forms the problem became very
clear. Over 600,000 people filed a claim. Each person who brought a valid claim would receive
$142-$285 taken from the $14.5 million settlement paid by American Eagle. While they were
willing to pay the settlement, they were not required to plead guilty and admit to sending these
messages.
 While they were forced to pay the settlement, nothing else came from this case. After a
few years of back and forth in this case the court dismissed all appeals and affirmed American
Eagles settlement. In 2019 consumers who were affected finally received their checks in the
mail.