Whistleblower Wins Jury Verdict Against BofI Federal Bank
Summary
Charles Matthew (“Matt”) Erhart filed a complaint in October 2015 in U.S. District Court for the Southern District of California against BofI Federal Bank, alleging that he was retaliated against and terminated after he reported wrongdoing at the bank to management and to federal regulators. He prevailed on his claims for violations of the Sarbanes-Oxley Act of 2002, California Labor Code § 1102.5, wrongful termination in violation of public policy, as well as on his claim for defamation.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 accountsThe 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. The jury was not able to reach unanimity on the award of punitive damages, and the retrial of that phase will begin on August 23, 2022. The fight is not over, as we will be returning to try the punitive damages phase of the trial before a new jury, and the bank will doubtless be filing post-trial motions and an appeal afterward. We hope this verdict sends a resounding message to corporations to take whistleblowers seriously.”Media Contact:Carol GillamThe Gillam Law FirmLos Angeles, CATel: (310) 203-9977Email: carol@gillamlaw.com admin@gillamlaw.com