Whistleblower Wins $1.5 Million Against Bank on Violations of Sarbanes-Oxley, Defamation and Other Claims; and Defeats All Six Counterclaims
The jury found that Mr. Erhart reasonably believed the following conduct by Bofl was a violation of state, local or federal law or regulation:
· provision of a misleading response to an SEC subpoena
· the existence of a host of loans to criminals and/or politically exposed individuals
· failure to disclose to regulators accounts with no Tax Identification Numbers
· failure to disclose subpoenas to regulators in response to a request from regulators
· recorded telephone calls
· high levels of deposit concentration risk
· failure to disclose to regulators a high risk customer report regarding Global Cash Card
· failure to disclose the existence of an audit under the Flood Disaster Protection Act
· CEO Greg Garrabrants’ depositing of third-party checks into his personal account
· untimely 401(k) payments to employee accounts
The complaint in this case alleges: After the head of internal audit resigned, bank management prepared to terminate Mr. Erhart on the same day as learning of his whistleblowing. After Mr. Erhart called off sick and the Bank discovered he had gone to regulators, the bank threatened to send San Diego police after Mr. Erhart, made a series of defamatory statements about him, and terminated him.
The jury found for Mr. Erhart on all his causes of action, and found that the bank acted with malice, fraud, or oppression,...
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