The chief operating officer for mobile payments company Square, Keith Rabois, abruptly resigned this week because an employee accused him of sexual harassment and demanded “millions of dollars” to stave off a potential lawsuit, Rabois said in a blog post yesterday.
The revelation by Rabois, a well-known senior executive and active startup investor, caused a sensation in Silicon Valley and ignited a flurry of online chatter about Square, founded in 2009 by Twitter co-creator Jack Dorsey.
In a lengthy Tumblr blog post, Rabois said he had been contacted by a New York attorney for his accuser, an unidentified male with whom he had a relationship beginning in 2010.
Rabois, who recommended the man for a position at Square, said he was recently told his accuser would file a lawsuit alleging that their relationship was not consensual, and that Rabois did “horrible things.”
“I was told that only a payment of millions of dollars will make this go away, and that my career, my reputation, and my livelihood will be threatened if Square and I don’t pay up,” Rabois wrote.
Rabois, 43, flatly denied the allegations and pledged to defend himself.
“The relationship was welcome,” Rabois wrote. “While I have certainly made mistakes, this threat feels like a shakedown, and I will defend myself to the full extent of the law.”
A lawyer by training, Rabois detailed how he met his accuser through mutual friends. Several months after the meeting and after they had spent time together, Rabois said he recommended his friend to the company, which hired him. It is unclear whether the accuser still works at Square.
Dorsey, who accepted Rabois’ resignation late on Thursday, declined to comment yesterday.