Included in a jaw-dropping lawsuit brought by Tinder's founders against its parent company, IAC, are allegations of sexual misconduct against its former CEO.

The lawsuit alleges that the former Tinder CEO and IAC Chairman Greg Blatt "groped and sexually harassed" Rosette Pambakian, Tinder's vice president of marketing, and that IAC conducted an internal investigation, not an independent one pushed for by Sean Rad, a Tinder cofounder.

Though Blatt was replaced in January by Mandy Ginsberg, a source tells Business Insider that Blatt was still frequenting Tinder's offices until recently.

Tinder's founders and executives have filed a lawsuit against their parent company, IAC, filled with some jaw-dropping allegations. They are seeking at least $2 billion in damages over what they allege was a deliberate attempt by IAC to cheat them out of money owed for their stock options.

IAC says the lawsuit is unfounded, based on "sour grapes," and that its subsidiary Match Group has paid out "in excess of a billion dollars in equity compensation to Tinder's founders and employees." (The company's full statement is below.)

But included in the lawsuit is another bombshell allegation: that the former Tinder CEO and IAC Chairman Greg Blatt "groped and sexually harassed" Tinder's vice president of marketing, Rosette Pambakian, at a company party, and that the company's human-resources department and legal counsel knew about the incident and "covered up" the alleged misconduct.

Specifically, the lawsuit alleges: "At Tinder's December 2016 holiday party in Los Angeles, Blatt, who had just taken over as Tinder's 'interim' CEO, groped and sexually harassed Rosette Pambakian ... In mid-2017, [Tinder cofounder Sean] Rad learned about these events ... Rad immediately reported Blatt's conduct to Match's General Counsel, Jared Sine."

Tinder cofounder Sean Rad. Vivien Killilea/Getty Images for Tinder/GLAAD

The lawsuit alleges that Sine and Match Group conducted an internal investigation led by an HR executive who had worked for Blatt for more than 10 years.

Rad, who was pushed out and replaced as CEO by Blatt, wanted an independent investigation, not one conducted by Match insiders, according to the lawsuit. It says that Rad asked to speak to the board about it but that his request was refused.

The suit alleges that IAC "even allowed Blatt to contact Pambakian and one of the eyewitnesses [of the alleged incident] directly, whom Blatt then pressured to conceal his misconduct." Blatt was allowed to continue his duties as interim CEO during the internal investigation, the lawsuit says.

And the lawsuit includes yet another serious allegation: that Match "had previously concealed other sexual misconduct allegations through confidential payoffs and settlements."

A source close to the Tinder executives tells Business Insider that Blatt remained involved with the company until recently and was frequently seen in the offices. However, Blatt's official involvement with the company is unclear. (We've asked IAC to clarify.) Blatt's long-standing corporate email account is no longer active, and he is not listed on IAC's management pages.

In January, Match promoted Mandy Ginsberg as CEO.

Rosette Pambakian Tinder

Here is IAC's full statement about the lawsuit.

"The allegations in the complaint are meritless, and IAC and Match Group intend to vigorously defend against them.

"Since Tinder's inception, Match Group has paid out in excess of a billion dollars in equity compensation to Tinder's founders and employees. With respect to the matters alleged in the complaint, the facts are simple: Match Group and the plaintiffs went through a rigorous, contractually — defined valuation process involving two independent global investment banks, and Mr. Rad and his merry band of plaintiffs did not like the outcome.

"Mr. Rad (who was dismissed from the Company a year ago) and Mr. Mateen (who has not been with the Company in years) may not like the fact that Tinder has experienced enormous success following their respective departures, but sour grapes alone do not a lawsuit make. Mr. Rad has a rich history of outlandish public statements, and this lawsuit contains just another series of them. We look forward to defending our position in court."