A former employee of the Bank of the Internet claims he saw wrongful conduct occur at BofI between his hiring in 2013 and his firing in June 2015. He cited over a dozen examples of wrongful conduct of a serious nature.
That conduct allegedly included items such as depositing third-party annuity checks into a personal account, maintaining a $4 million account for the CEO's impoverished brother, and changing account entries in order to get around rules against lending to known criminals. Some of the alleged wrongdoing violated the Sarbanes-Oxley and Dodd-Frank acts.
When he reported this conduct internally, he was allegedly warned by a senior vice president that if he "continues to turn over rocks, eventually he is going to find a snake and he's going to get bit."
He continued to turn over rocks, apparently, and got bit. After officials at the bank searched his work records and computer and began drafting termination papers, the employee sought whistleblower protection from the Office of the Comptroller of Currency.
Despite that protection, however, the man says that BofI officials have made public statements claiming he is incompetent and dishonest and that he conspired with shareholders to short-sell BofI stock. He claims that these statements are false and defamatory. He also claims the bank breached his medical confidentiality, intentionally inflicted emotional distress and breached faith.
BofI sought to have the whistleblower claims dismissed on the grounds that he sought protection from the Comptroller of Currency too late. According to the bank, he was fired before he reported any alleged violations to a federal agency and was therefore not entitled to whistleblower protection. It also moved to strike several of the man's allegations as irrelevant.
A federal judge gave a key initial victory to the whistleblower, ruling that the case can move forward. She refused to dismiss the Sarbanes-Oxley and Dodd-Frank allegations and ruled that he had made sufficient claims to show he had engaged in protected whistleblowing activity. She also refused to dismiss the bank's motion to strike the supposedly irrelevant allegations, ruling they were indeed relevant.
The case is not resolved; it will now move forward to trial. The whistleblower will get his day in court to prove that he was fired in retaliation for reporting wrongful conduct.
If you have noticed unethical or illegal behavior in your workplace and your employer has a government contract, you should know that many acts of whistleblowing are protected by federal law. It is unlawful for your employer to retaliate against you for reporting alleged wrongdoing when a government contract is involved. It is still a good idea, however, to discuss your concerns with an employment law attorney before making any moves that might put your job or reputation in jeopardy.