Startups often promise disruption — a fresh spin on an old industry. But when a dry-cleaning delivery venture unraveled amid fraud allegations, it left behind more than just disappointed investors; it sparked a legal battle over who knew what, and when. That fight has now reached its conclusion, as Cooley LLP and an angel investor who accused the firm of malpractice have resolved their dispute, according to filings submitted to a New Jersey federal court this week.

The Deal That Closed the Case

Jason Gould, an angel investor who backs high-tech startups through his company Gould Ventures LLC, formally dismissed his claims against Cooley and two of its attorneys — this time with prejudice, meaning the case cannot be refiled. The stipulation, signed Sept. 3, was docketed Wednesday, bringing the Cooley, Investor Malpractice Suit Settlement to its formal close.

How the Trouble Began

Gould originally filed suit against the firm and four attorneys in September 2024, alleging Cooley concealed critical information from him about fraudulent conduct unfolding at Carbon IQ, a company he was pouring money into. Cooley, notably, had been serving as corporate counsel for Carbon IQ at the time — a dual role Gould claimed created a conflict that worked against his interests.

Missing Insurance, Missing Warnings

According to Gould's allegations, Cooley falsely assured him that Carbon IQ carried directors and officers insurance when, in fact, it did not. Even more troubling, Gould claimed the firm failed to disclose that Benjamin Cantey — Carbon IQ's CEO and sole board member — was already under investigation for fraud by the Texas State Securities Board, a red flag Gould said never reached him.

The Domino Effect of Withheld Information

Gould alleged that because Cooley kept him in the dark, he not only invested additional money into the company but also agreed to take a seat on Carbon IQ's board of directors — a decision that came back to bite him almost immediately. Once on the board, Gould found himself named as a defendant in a separate lawsuit brought by another investor, a legal entanglement he says he never would have walked into with full information.

Tallying the Damage

By the time he filed his own suit, Gould claimed his involvement with Carbon IQ had cost him nearly $1 million altogether — a combination of his direct investment losses and the legal fees he racked up defending himself against the other investor's claims.

The Legal Theories at Play

Gould's lawsuit accused Cooley — which eventually withdrew from representing Carbon IQ entirely — of securities fraud, common law fraud, legal malpractice, aiding and abetting fraud, negligent misrepresentation and breach of fiduciary duty, a sweeping list of claims that painted the firm's conduct as far more than a simple oversight.

A Partial Setback Before the Settlement

The case hit a speed bump in May 2025, when a New Jersey federal judge trimmed the suit significantly, granting Cooley's motion to dismiss the malpractice claims on the grounds that Gould had never actually been a Cooley client. The judge also tossed claims against two of the firm's attorneys entirely. U.S. District Judge Robert Kirsch dismissed those claims without prejudice, however, giving Gould a 30-day window to file an amended complaint and keep his case alive.

The Fraud at the Center of It All

Underscoring the seriousness of the underlying allegations, Carbon IQ's CEO, Benjamin Cantey, was sentenced in July to 40 months in federal prison for defrauding investors out of $6.5 million, according to a statement from the U.S. Attorney's Office for the Southern District of Ohio — a criminal conviction that lent weight to the broader narrative Gould had been alleging all along.

Counsel for both Gould and Cooley did not respond to requests for comment Friday.

The Legal Teams Involved

Gould is represented by Kathleen M. DalCortivo of DalCortivo Law Offices LLC.

Cooley and the defendant attorneys are represented by Sarah A. Sullivan and Alexander L. Callo of Saul Ewing LLP, along with Brian M. French of Cooley LLP.

In the end, the settlement closes a chapter that began with a promising startup pitch and ended with a prison sentence, a dismissed malpractice claim, and a quiet resolution far removed from the courtroom drama that preceded it.