The Department of Labor has ordered former Primelending employees to pay $35,000 as recompense to two fired whistleblowers who reported pressure to commit an alleged
The money will compensate the whistleblowers for back-wages, related interest and emotional distress that followed their reports about a branch manager, according to the department. The manager allegedly wanted them to charge consumers fees for the lender's processing holdups.
"Employees who report potential consumer fraud are protected by federal law against retaliation of any kind," said James Wulff, regional administrator at the Department of Labor's Occupational Safety and Health Administration.
"Under the Consumer Financial Protection Act's whistleblower provisions, managers can be fined personally for retaliation," he continued. "In this case, OSHA fined three Primelending managers for trying to prevent workers' concerns from coming to light."
The department said it ordered a former senior vice president and two managers to make the payments, but did not otherwise specifically identify the former employees involved due to its policy of not naming individuals involved in whistleblower complaints.
In addition to ordering certain ex-employees to make payments, the Department of Labor calls upon the company to display information at various offices stating that whistleblowers won't face repercussions. It also requires the lender to provide training around worker rights that the aforementioned legislation protects.
Primelending had not responded to a request for comment at deadline.
The order echoes some broader current themes in enforcement, including the Consumer Financial Protection Bureau's focus on charges in financing it considers to be improper or
The Supreme Court's decision in Murray v. UBS Securities LLC in February expanded protections for whistleblowers at covered companies under the Sarbanes Oxley Act.
The case involves a commercial-mortgage backed securities strategist who contended in court documents that "two leaders of the CMBS trading desk improperly pressured him to skew his reports to be more supportive of their business strategies," according to the decision.
The justices overturned an earlier decision in the Second Circuit Court of Appeals and found that the plaintiff did not have to prove that the company acted "with retaliatory intent."
A Department of Justice official also announced last month that it will be experimenting with a program aimed at expanding the availability of incentive payments to whistleblowers.
While noting that previous payments have been limited to agencies' jurisdiction or qui tam cases involving "fraud against the government," Deputy Attorney General Lisa Monaco said the pilot program aims to also encompass "significant corporate or financial misconduct."
Under the program the DOJ is engaging in a "90-day sprint" to launch later this year, whistleblowers reporting issues the department is not otherwise aware of "could qualify to receive a portion of the resulting forfeiture" that doesn't overlap with qui tam or other payments.
Within the housing finance industry, other whistleblower developments in the past year include
