San Diego-based Bank of the Internet, which calls itself the oldest and most trusted online bank, was sued by a former auditor who said he was fired after presenting a report to his superiors.
Charles Erhart claims he uncovered many violations of state and federal law at the bank and was repeatedly threatened, harassed and ultimately fired for "trying to do the right thing."
FBR & Co. issued a statement Wednesday defending the bank, whose corporate name is BofI Holding Inc. (Nasdaq: BOFI). FBR said the Office of the Comptroller of the Currency found no merit in Erhart's allegations.
Erhart, who asserts whistle-blower status under the Sarbanes-Oxley Act, seeks damages for alleged retaliation, wrongful termination and defamation, according to his complaint filed Tuesday in San Diego federal court.
"The complaint recycles old, baseless and factually inaccurate allegations from an inexperienced, underperforming, junior audit team member who had been with the bank for a short period of time," BofI Holding Chief Executive Officer Gregory Garrabrants said on a conference call Wednesday.
"The complaint is riddled with evidence of basic misunderstandings, inaccuracies, out of context statements, and illogical conclusions," he said.
The San Diego-based bank fell 30 percent to $99.13 in New York trading on Wednesday, but is up almost 13 percent to $111.99 in midday trading Thursday.
The case is Erhart v. BofI Holding Inc., 3:15-cv-02287, U.S. District Court, Southern District of California (San Diego).