California-based nonbank lender loanDepot is suing former chief operations officer Tammy Richards for breach of contract and fiduciary duty, accusing her of stealing confidential information concerning the lender’s customers.
The move is part of a legal battle that started in September 2021 when Richards filed a lawsuit alleging the lender closed thousands of loans without proper documentation to boost its performance ahead of its initial public offering (IPO) on the New York Stock Exchange.
loanDepot hired Richards in February 2018 to oversee its channels at that time — retail, wholesale, consumer direct and joint ventures — as well as processing, underwriting, closing and operational support functions.
The lender claims that, due to Richards’s senior role, she had access to highly sensitive and private information that she agreed to protect by following loanDepot’s policies. It includes a confidentiality agreement attached to the lawsuit that she supposedly agreed to on March 27, 2018.
However, on Oct. 17, 2022, during a deposition for the lawsuit Richards filed against loanDepot two years ago, “Richards testified that she secretly used a video recording application on her personal cell phone to record a spreadsheet that identified loan information for over 8,000 loanDepot customers,” the lawsuit states.
Richards claimed that these loans, part of Project Alpha, were approved without proper documentation and excluded from internal audit. If true, that would violate federal laws, including the Dodd-Frank Act, which requires minimum standards for all mortgage products.
loanDepot claims that Richards stole confidential information, including individual loan numbers, FICO scores and debt-to-income ratios. Then, Richards sent the information to herself without using “her work email account because loanDepot would have been able to detect her wrongdoing,” the company said.
The lawsuit states that Richards testified that she understood that such information was confidential and private but shared it with her attorneys and says she has refused to delete the information despite several requests, including a cease and desist letter from Oct. 31, 2022.
loanDepot filed the lawsuit on Oct. 17, 2023, in the Superior Court of the State of California for the County of Orange. It includes accusations of breach of contract, breach of fiduciary duty, conversion, unfair competition and violations of California Penal Code.
A spokesperson said the company will let the court filing speak for itself.
Richards’s attorney, James A. Bryant, a partner at The Cochran Firm in California, said the former executive preserved evidence of Project Alpha as proof of potential illegal acts, sharing it with attorneys and regulators.
Bryant said that “the meritless lawsuit filed by LoanDepot is nothing more than an attempt to intimidate and retaliate against Ms. Richards” for having the courage to stand up to the company.
In the lawsuit, loanDepot painted Richards as “inept” in leading her team and said concerns with her performance grew in 2020 — including her “blundered rollout of new technology, inadequate training and poor staffing.”
It also claimed the company needed its “COO to step up” when the market was booming. But “instead, Richards crumbled.”
The lawsuit states that Richards hired an attorney on Nov. 30, 2020, and informed loanDepot that she needed to take an immediate leave of absence. After one month, she sent a demand letter through her counsel, threatening claims of retaliation, gender discrimination, gender and sexual harassment, among others.
On Mar. 30, 2021, Richards resigned from her position at loanDepot. She filed a lawsuit for wrongful termination in California in September 2021.
“Ms. Richards, one of the most respected members of the mortgage community, will not cower to these bullies who have resorted to a failed campaign to attack her character for the purpose of distracting the public and regulators from their actions as alleged in her lawsuit,” Bryant added.
