Loans

Former Primelending employee caught in whistleblower issue



The Labor Department has ordered former Primelending employees to pay $35,000 to two fired whistleblowers who reported they were pressured into committing alleged violations. mortgage fraud Improper charges.

The money will compensate the whistleblower for back wages, related interest and emotional distress after reporting the branch manager, according to the department. The manager apparently wants them to charge the consumer a fee for the lender’s delay in processing.

“Employees who report potential consumer fraud are protected by federal law from retaliation of any kind,” said James Wulff, regional administrator for the U.S. Department of Labor’s Occupational Safety and Health Administration.

He continued, “Under the Consumer Financial Protection Act’s whistleblower provisions, managers can be subject to individual fines for retaliation. In this case, OSHA fined three Primelending managers for trying to prevent workers’ concerns from being brought to light. exposure.”

The department said it ordered a former senior vice president and two managers to pay the money, but it did not identify the former employees involved because of the department’s policy of not disclosing individuals involved in whistleblower complaints.

In addition to ordering payments from certain former employees, the Labor Department is calling on the company to display information at various offices that whistleblowers will not face consequences. It also requires lending institutions to provide training on workers’ rights protections under the aforementioned legislation.

Primelending did not respond to a request for comment by deadline.

The order echoes some of the broader themes in current enforcement, including the Consumer Financial Protection Bureau’s focus on allegations of financing it deems inappropriate or improper. “trash feeas well as the Supreme Court’s recent ruling in favor of whistleblowers.

The Supreme Court’s February ruling in Murray v. UBS Securities LLC expanded Sarbanes-Oxley protections for whistleblowers at regulated companies.

According to the ruling, the case involved a strategist backed by commercial mortgage-backed securities who argued in court documents that “two leaders of the CMBS trading desk exerted undue pressure on him to distort his reporting to be more supportive of them.” business strategy”.

The judge reversed an earlier ruling by the 2nd Circuit Court of Appeals and found that the defendants did not have to prove that the company acted “with retaliatory intent.”

A Justice Department official also announced last month that it would pilot a program to expand rewards for whistleblowers.

Deputy Attorney General Lisa Monaco noted that previous payments were limited to agencies’ jurisdictions or qui tam cases involving “fraud against the government,” but the pilot program is designed to cover “significant corporate or financial misconduct.” ”.

Under the plan, the Justice Department will launch a “90-day sprint” later this year in which whistleblowers who report problems of which the Justice Department is unaware “may be eligible for partial forfeiture” and do not overlap with investigations. tam or other payment.

Within the housing finance industry, other whistleblower developments over the past year include $23.75M Liquid Mortgage Settlement Alleged violations of the False Claims Act while underwriting government-backed loans.





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