Snap Founders Accused of Stock Scheme to Keep Perpetual Control

A pension fund sued Snap Inc. and its founders in Delaware, challenging their plan to prop up the tri-class stock structure that gives them 99.5% voting power over the company despite their minority stake.

The lawsuit accuses Snap’s board of adopting charter amendments aimed at letting co-founders Evan Spiegel and Robert Murphy sell large amounts of stock without triggering a series of stock conversions intended to simplify the company’s structure and hand control over to public investors.

“This series of transactions effects a radical change to the control structure of a Delaware corporation with a market capitalization in excess of ...