LoanDepot lawsuit accuses lender of cutting corners
Those deals made Mr. Hsieh prosperous, but Debt Depot pushed him into a new stratosphere of wealth. Mr Hsieh – its largest individual shareholder by far – became a billionaire on paper when the firm went public in February. LoanDepot shares started at $14; They have since come down to nearly half that price, valuing the company at around $2.2 billion.
Ms. Richards said in her lawsuit that the planned initial public offering was a motive for company executives to cover up Mr. Hsieh’s increasingly reckless behavior. In 2020, as the offering drew to a close, LoanDepot paid its leaders “a special one-time discretionary bonus” described in a regulatory filing. Mr. Hsieh received $42.5 million, and other top executives received domestic cash bonuses ranging from $9 million to more than $12 million.
Ms Richards, who said she was demoted in November and dropped out of that special bonus round, resigned in March. Her lawsuit seeks compensation for unpaid bonuses and forfeited stock estimated to be worth at least $35 million.
LoanDepot is led by a group of online upstarts that use technology to speed up and simplify mortgage loans. Last year, it generated nearly 300,000 — more than double the number a year earlier — and was the nation’s fourth-largest mortgage provider, according to iEmergent, which tracks industry data.
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Mr. Hsieh has long made growth a priority and regularly adds new incentives and products to his firm’s lineup. “We will never be a company that is satisfied or that rests on our respect,” he told analysts on an earnings call last month. Some workers have said they appreciate the intensity and opportunities for bigger paychecks, but complaints of crushing workloads, high turnover and burnout are common among former employees.
Ms Richards’ complaint describes the company, which she joined in 2018, as having an “unfairly ‘frat house’ culture” where harassment was common and top sellers were brought to wild parties in which once Sometimes drugs and prostitutes were involved.
In 2019, a high-ranking woman at LoanDepot accused a male executive of sexually assaulting Mr. Hsieh at a company party on her boat; Ms Richards, who was not at the event, was asked to run the investigation because the company’s male executives, including its human resources chief, were not wanted, her suit said. (She said she learned that both employees were intoxicated and disagreed about whether the encounter was consensual.)
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