(CN) – A California man sued the founder of home security company Ring in state court Friday, alleging that Jamie Siminoff, whose company was featured on the TV show “Shark Tank,” bilked him out of $300 million.
Russell Stephens, a Silicon Valley entrepreneur, said he was an early adviser to Siminoff and invested more than $100,000 into the company in exchange for stock after Siminoff failed to secure an investor on the popular TV show in 2013.
The company, which manufactures motion based doorbell cameras, became a success without the help of the show and later became a guest judge. In April 2018, Amazon purchased the tech company for more than $1 billion.
That’s when Siminoff refused to honor Stephens’ contributions, according to the complaint.
“Ring trumped up a disingenuous and unsupportable interpretation of Russell's option agreements and refused to honor them, leaving Russell with nothing for his years of service and contributions to Ring’s technology,” the lawsuit states.
Russell says that he agreed to help Siminoff with his then-struggling business in exchange for ownership interest. The complaint said that Russell served as an adviser on product and business development, sat on the company’s board of directors, and used his personal knowledge to help invent new technology.
While the company was still floundering, Russell said he invested more than $100,000 in the company in exchange for over 200,000 shares in a stock option agreement.
When Russell had to resign from the board due to contracting Lyme disease in 2016, Ring’s counsel emailed him to ask him to sign over his rights to the technology he helped create. Russell did so only because he said he believed the company would honor the stock agreement.
Following the news of the company’s acquisition by Amazon in April, Russell contacted the company and asked to cash in on his stock.
Ring’s general counsel Leila Rouhi refused to honor his stock option rights, “contending that Russell had forfeited all such rights by not exercising them within 30 days of offering to resign from Ring's Board of Directors on October 31, 2016,” according to the complaint.
Among other charges, Russell is suing Siminoff and Ring for fraud and is asking for rescission of the patents he signed away after resigning from the board.
Russell is represented by Darren Enenstein of Enenstein, Pham & Glass LLP in Los Angeles.
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