PASADENA, Calif. (CN) — In 2022, a San Diego jury found an ex-auditor at Axos Bank was fired in retaliation for reporting financial misconduct. On Wednesday, Axos told a Ninth Circuit panel the whistleblower was actually fired because he never returned from medical leave.
Charles Matthew Erhart, a former internal auditor at what then was called Bank of Internet, a digital, branchless bank, then headquartered in San Diego, sued the bank in 2015 claiming they violated the the Sarbanes-Oxley Act of 2002 — a federal law enacted to protect shareholders and employees in the wake of the Enron scandal — when they fired him for reporting misconduct allegations to the Office of Comptroller of the Currency.
Erhart claimed the bank broke a number of laws including illegally recording calls with people with structured settlements or lottery payments it tried to purchase, giving misleading responses to a subpoena from the Securities and Exchange Commission, failing to disclose subpoenas to the Office of the Comptroller of the Currency, handing out risky loans to criminals or “politically exposed” people and an incident where supervisors asked him to remove a finding from a report or mark it “attorney-client privileged” so it would not be discoverable should a class action be filed against the bank.
A jury sided with Erhart on a number of his claims, including that he was fired for blowing the whistle and that he reasonably believed the bank was breaking the law. Erhart was awarded $1...
On July 2, 2025, the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Justice (DOJ) announced that they are forming the DOJ-HHS False Claims Act Working Group to furthe...