Justice Dept. drops HubSpot case with no charges, but leaves plenty of questions

HubSpot went public in 2014.
HubSpot went public in 2014.

The Justice Department has dropped its criminal investigation of two former HubSpot employees for their alleged attempts to obtain a manuscript of a forthcoming book about the company, its author said Tuesday.

Dan Lyons, whose chronicle of life in the startup world is scheduled to be published in April, said he received a letter last weekend from the Boston FBI office confirming that the investigation was closed and no charges would be brought by federal prosecutors.

But Lyons, who was characterized as the victim in the case, said he still has not been informed about the events that triggered the departure of the two HubSpot executives and the launch of the investigation.

“I still don’t know what they did. And I tried to find out — I hired a lawyer who tried to find out,” Lyons said. “I cooperated with the FBI and the assistant US attorney and I was interviewed by them. They wouldn’t tell me.”

HubSpot, a Cambridge-based developer of sales and marketing software, announced in July that it had fired chief marketing officer Mike Volpe for violating the company’s ethics policy “in connection with attempts to procure a draft manuscript of a book involving the company.”

HubSpot also said its vice president of content, Joe Chernov, resigned before the company could determine whether he also should be fired. Chief executive Brian Halligan was fined for failing to promptly alert the company’s board after finding out about the incident.

Spokeswomen for the Boston FBI office and Boston US Attorney Carmen Ortiz declined to comment. HubSpot and Chernov also declined to comment. Volpe did not respond to messages seeking comment.

Volpe has since reemerged as a startup investor and adviser, while Chernov was hired in August as a vice president at local sales software company InsightSquared.

In an interview in July after firing Volpe, Halligan described Volpe’s efforts to obtain the manuscript as “really aggressive tactics,” but he refused to disclose further details. “There was definitely some fishiness,” Halligan told the Globe.

HubSpot said its board of directors hired an outside law firm, Goodwin Procter, to investigate the book-manuscript incident, and that its findings were turned over to “the appropriate legal authorities.” In September, BetaBoston reported that federal officials, including an assistant US attorney in Boston and an FBI cybercrimes agent, had opened a criminal investigation.

Hubspot has not disclosed what Volpe, one of the company’s first employees, did to warrant his firing. But the incident captivated Boston’s tech sector, which has seen HubSpot rise from fledging startup to publicly traded company with more than 1,000 employees spread among offices in Kendall Square, Dublin, and Sydney.

Despite the intrigue, the scandal did not affect investor appetites for the company’s stock.

Lyons is a veteran tech-industry writer who has worked on the HBO series “Silicon Valley.” He spent 20 months working in HubSpot’s marketing department between April 2013 and December 2014, a period that included the company’s IPO.

He then left and started working on a book about his experience, “Disrupted: My Misadventure in the Start-Up Bubble,” that its publisher promises will be “a hilarious story of self-reinvention and a definitive account of life in the tech bubble,” including a workplace culture described as “frat house meets cult compound.”

Lyons declined to discuss the details of what he wrote. Asked what might be in the book that would prompt such a high-profile scandal, he replied, “I’ve asked myself the same thing, and I haven’t come up with a good answer.”

Lyons said Halligan, one of HubSpot’s two founders, began e-mailing him in June to inquire about the contents of the book.

“We traded a few e-mail messages, and then he went dark,” Lyons said. “And then a month later, they announced Volpe was fired and Halligan was sanctioned. And I don’t know if those things are related or not.” Lyons said he also wrote to a member of HubSpot’s board in search of more details, but has not received a reply.

“I would love it if someone from HubSpot would call me and tell me, explain what happened. I know there’s a bunch of people who all know, and I don’t know why they won’t tell me,” Lyons said. “Especially since they talk about being radically transparent, and that’s one of the core values at HubSpot.”

In early October, Lyons said federal prosecutors told him they would not to file charges. The letter he received in late December from the FBI’s Boston division confirmed the case had been closed because the US attorney “has declined to prosecute in the case,” according to a copy of letter reviewed by BetaBoston.

The entire incident prompted Lyons to write a new epilogue to the book.

“It’s like someone telling you that you may have been robbed, but we’re not going to tell you for certain, and we’re not going to tell you what was stolen. It’s weird,” Lyons said. “I think the epilogue will be interesting reading.”

Updated at 9 p.m. with additional detail, minor edits.