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  18. Extortion, hacking claims sparked HubSpot investigation, FBI records show
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  36. Players in the drama included Mike Volpe, the HubSpot executive who was fired.
  37.  
  38. Players in the drama included Mike Volpe, the HubSpot executive who was fired.
  39. By Curt Woodward Globe Staff March 24, 2016
  40.  
  41. The now-closed investigation into an ethics scandal at HubSpot Inc. was sparked by allegations that federal authorities received of “multiple failed attempts to manipulate and extort people” that were aimed at stopping publication of a book about the company, documents show.
  42.  
  43. Records released by the FBI in response to a Freedom of Information Act request by the Globe include memos explaining the agency’s reason for opening an investigation. They also includes notes of an interview with Dan Lyons, a Winchester author and former HubSpot employee whose forthcoming book about his experiences at the startup triggered the events leading to the investigation.
  44.  
  45. However, they do not include any records indicating why federal authorities declined to prosecute anyone.
  46.  
  47. The documents are redacted in many places and do not identify anyone involved in what is described as an alleged plot to “railroad” Lyons’s book, “Disrupted: My Misadventure in the Start-Up Bubble.”
  48.  
  49. The US attorney’s office in Boston declined to comment Wednesday.
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  51. New book’s unflattering portrait
  52.  
  53. The former employee’s book shows a hard-driving workplace full of office politics and backstabbing.
  54.  
  55. In a report dated Aug. 11, about two weeks after HubSpot disclosed it had fired chief marketing officer Mike Volpe, the FBI requested a full investigation into the book incident. It asked that the case be assigned to both white-collar crime and cybercrime investigators.
  56.  
  57. The FBI memos say that Lyons’ book was seen by some at HubSpot as not only a potential embarrassment but “a financial threat to HubSpot, its share price, and the company’s future potential.”
  58.  
  59. The documents also say there was an effort “to obtain sensitive information on individuals with access to the book’s transcript, or control of the publishing deal. The information found was then used as leverage in an attempt to prevent the book from reaching the market place.”
  60.  
  61. The report also mentions “tactics such as email hacking and extortion” in the attempt “to railroad the book.”
  62.  
  63. HubSpot, a marketing software company in Cambridge, announced in late July that it had fired Volpe “in connection with attempts to procure a draft manuscript of a book involving the company.”
  64.  
  65. HubSpot also said a vice president, Joe Chernov, resigned before the company could determine whether he also should be fired.
  66.  
  67. Chief executive Brian Halligan was fined for failing to promptly alert the company’s board of directors after finding out about the incident.
  68.  
  69. The actions were a result of an investigation by law firm Goodwin Procter on behalf of HubSpot’s board.
  70.  
  71. Halligan said last year that the incident involved “some fishiness” and “really aggressive tactics,” but HubSpot has refused to disclose any details about what the company found in its internal investigation.
  72.  
  73. “We turned our findings over to the authorities. We haven’t had any additional communication with them since cooperating with the investigation last year, but it’s our understanding that they chose not to pursue any criminal charges,” HubSpot’s general counsel, John Kelleher, said Wednesday.
  74.  
  75. Chernov declined to comment. Volpe did not respond to messages seeking comment.
  76.  
  77. Lyons was designated as the victim in the case. He signed a privacy waiver that allowed federal officials to release more details to the Globe.
  78.  
  79. A journalist and screenwriter, Lyons received similar documents from the government. In an interview, he said that he believes the files portray a more serious case than what HubSpot had indicated in its public statements.
  80.  
  81. “The big issue here is about corporate governance and how the board has handled this,” he said Wednesday.
  82.  
  83. “HubSpot owes a full explanation to its shareholders, and instead of providing one the company has been covering up.”
  84.  
  85. Robert L. Peabody, a white-collar defense attorney for Jackson Lewis and former assistant US attorney, said federal prosecutors may decline to bring charges in a case like the HubSpot matter if they’re not sure they could prove the allegations beyond a reasonable doubt.
  86.  
  87. The HubSpot case could have also been handled as a civil dispute, with the parties fighting it out in court, Peabody said.
  88.  
  89. “In a case where there’s a real matter of life and limb and property at issue, the government may step in and try to stop that evil-doer. But in this case, it’s a corporate dispute,” Peabody said.
  90.  
  91. Another federal document, notes from an interview with Lyons, probes for possible reasons why anyone from HubSpot would take drastic steps to get the manuscript.
  92.  
  93. The report said Lyons “had no knowledge of infidelity or illegitimate children with regards to any of HubSpot’s employees,” although he told the investigator that a HubSpot employee whose name is redacted “spoke about different women who worked with them in a sexual context.”
  94.  
  95. Lyons, who revealed to federal investigators that he was paid $240,000 plus possible royalties for the book, told them he wasn’t aware of anyone trying to get his manuscript until he learned of the investigation.
  96.  
  97. “He stated that if someone from the company had just asked him for the information, he likely would have given it to them,” the report said.
  98.  
  99. Curt Woodward can be reached at curt.woodward@globe.com. Follow him on Twitter @curtwoodward.
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