Ex-CCO of California Money Transmitter Brings Whistleblower Claims over Change of Control

The former chief compliance officer (CCO) of a California money transmitter recently brought whistleblower retaliation and wrongful termination claims against her former employer, stemming from the money transmitter’s change of control.  The CCO seeks compensatory and punitive damages along with attorney’s fees and court costs.

The CCO alleged that her former employer planned to be acquired by another company in a manner that circumvented the state’s change of control requirements for money transmitter licensees.  The CCO further alleged that her former employer terminated her employment because it believed she would disclose to the California regulator that the company’s change of control application was fraudulent and because she refused to withhold information from the state regulator regarding material changes to the company in order to hasten the acquisition.  Specifically, the CCO alleged that the company’s CEO suggested that the company surreptitiously make personnel changes after obtaining regulatory approval of the acquisition and that she contacted the regulator to report that the company would make more changes to personnel than disclosed.  According to the complaint, after discussing the change-of-control requirements with company leadership multiple times over several months, the company terminated her employment the same day that she contacted the DFPI to discuss these undisclosed personnel changes.