Fashion tech startup CEO kept job for 3 months – Business News
The board of flashy fashion tech startup CaaStle found its CEO had defrauded buyers out of $283 million – after which allowed her to remain on as the highest exec for three months, in response to a report.
Christine Hunsicker was the co-founder and CEO of CaaStle, an online fashion rental company valued at $1.25 billion at its peak in 2018. The company raked in more than $600 million from big-name buyers like Bill Ackman and Henry Kravis.
But within the spring of 2025, the company revealed that Hunsicker had been grossly overvaluing CaaStle’s financial earnings, and this March, (*3*)she pleaded guilty to securities fraud.
Christine Hunsicker pleaded guilty to a $283 million fraud scheme. AP
CaaStle is now going through a number of lawsuits alleging the board – which traditionally had solely three administrators, one of which was Hunsicker – failed to note apparent purple flags, after which kept Hunsicker on for months with out alerting buyers, in response to the New York Times.
A consultant for Hunsicker didn’t instantly reply to The Post’s request for remark.
The lawsuits largely give attention to Jaswinder Pal Singh, one other co-founder of the company who was seen as CaaStle’s software program whiz and a longtime laptop science professor at Princeton University.
Around October 2024, when buyers began questioning the startup’s funds, Singh offered $6 million price of CaaStle stock back to the company, in response to a lawsuit filed in March by chapter trustee George Miller.
A source close to the company instructed The Post that the stock buyback was deliberate earlier than and accomplished previous to any questions being raised by buyers.
Singh then allegedly performed a key function in holding Hunsicker’s fraud from buyers and permitting her to stay because the chief govt over the subsequent three months, in response to the swimsuit.
One lawsuit, citing Hunsicker’s ex-husband, alleged Singh and Hunsicker had an affair 20 years in the past, so Singh had “a strong personal interest in protecting” her.
An Instagram video explaining CaaStle’s online rental business model. CaaStle for Creators / Instagram
“JP [Singh] was a cofounder and major shareholder who rejoined the board after several years away from the company in hopes of stabilizing the company, contributing months of uncompensated effort and voluntarily providing capital to pay employees and help preserve stakeholder value for everyone,” a spokesperson for Singh instructed The Post.
“The board, with the advice of legal counsel, responsibly exercised its business judgment regarding available options and communications with shareholders.”
Singh has not been charged with a crime, and there may be no proof he was conscious of Hunsicker’s fraudulent scheme.
He had allegedly helped win over main buyers, like Bill Ackman, whose youngsters attended Dalton School – the distinguished Manhattan prep faculty the place Singh served as a trustee.
CaaStle had raked in more than $600 million from big-name buyers, together with Bill Ackman (above). REUTERS
A spokesperson for Ackman instructed the Times he at the moment owns “substantially less than 1 percent of the company,” and declined to supply additional remark.
Singh additionally allegedly instructed different buyers that the company acquired a substantial investment from enterprise capitalist Jim Breyer. Breyer declined to remark.
In 2011, Hunsicker based Gwynnie Bee, an online fashion rental company just like Rent the Runway – permitting clients to rent a handful of clothes gadgets every month at a fixed subscription charge – that was geared towards plus-size ladies.
But workers feared the business model would fail, because it relied on referrals – and “Plus-size women didn’t want to refer other plus-size women because you are essentially calling other women fat,” Kaeya Majmundar, Hunsicker’s former apprentice, instructed the New York Times.
It rebranded in 2018 to CaaStle – with the primary 4 letters standing for “clothing as a service” – and sought to function the tech and logistics platform for main clothes manufacturers, signing offers with Ann Taylor, Express and Vince.
According to Hunsicker’s plea deal, she began sharing fraudulent financial paperwork with buyers in 2019.
The discrepancies had been egregious. A new audit obtained by the Times confirmed the company had reported internet revenues of practically $440 million to some buyers in fiscal 12 months 2023 – when the true determine was a mere $15.7 million.
Hunsicker based Gwynnie Bee in 2011, and later rebranded it as CaaStle. Bloomberg
But the board didn’t discover something was amiss till 2024, when somebody managing Kravis’ investment flagged their suspicions to John Hennessy.
Hennessy – chairman of Alphabet’s board and a laptop scientist generally known as the “godfather of Silicon Valley” – was a director on CaaStle’s board. But a week after Kravis’ staff raised alarms, Hennessy mentioned he was no longer a member of the board – and that he had really resigned three years earlier, in response to the lawsuit filed by Miller.
“Mr. Hennessy is a very well-respected person and carried himself with integrity throughout his distinguished career. Mr. Hennessy did not engage in wrongdoing and did not condone any wrongdoing,” a spokesperson for Hennessy instructed The Post. “In fact, he was a victim.”
Hennessy’s absence meant Scott Callon, a Tokyo-based asset supervisor, was the one voting member of the board other than Hunsicker.
In December 2024, Hunsicker admitted to the fraud during a video call with Callon and Singh – however she refused to step down, saying she wouldn’t depart the board except Singh took her place on the company, in response to the lawsuit filed by Miller.
“As the other board member, I had no options to remove Christine from these roles unilaterally,” Callon instructed the Times in a assertion, confirming he complied along with her demand.
Callon didn’t instantly reply to The Post’s request for remark.
