Sexual Harassment Claims Drove Rabois from Square

On Friday morning, MMW confirmed news of Square COO Keith Rabois’ stunning and altogether unexpected departure from the company.

At the time, no reason was given for his unexplained exodus. But now we are gathering more information about the biggest development in the mobile payments space today.

As it turns out, Rabois was accused of sexual harassment by an employee. Moments ago, the following statement from Square was released to the press.

The first we heard of any of these allegations was when we received the threat of a lawsuit two weeks ago. We took these allegations very seriously and we immediately launched a full investigation to ascertain the facts. While we have not found evidence to support any claims, Keith exercised poor judgment that ultimately undermined his ability to remain an effective leader at Square. We accepted his resignation.

Rabois is also coming forward to address the controversy, saying the following in a personal blog post this afternoon:

Last week, a New York-based attorney threatened Square and myself with a lawsuit. I am told this lawsuit would allege that the relationship was not consensual, and would go on to accuse me of some pretty 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.

I realize that continuing any physical relationship after he began working at Square was poor judgment on my part. But let me be unequivocal with the facts: (1) The relationship was welcome. (2) Square did not know of the relationship before a lawsuit was threatened; it came as a complete surprise to the company. (3) He never received nor was denied any reward or benefits based on our relationship. And (4), I did not do the horrendous things I am told I may be accused of. While I have certainly made mistakes, this threat feels like a shakedown, and I will defend myself to the full extent of the law.

MMW will keep you informed of additional details as they emerge.