LoanDepot lawsuit accuses lender of cutting corners
These deals made Mr. Hsieh rich, but LoanDepot catapulted him into a new stratosphere of wealth. Mr. Hsieh – by far his largest individual shareholder – has become a billionaire on paper when the company went public in February. LoanDepot shares debuted at $ 14; they’ve since fallen to about half that price, leaving the company with a valuation of around $ 2.2 billion.
The planned initial public offering was a motive for company executives to cover up Mr Hsieh’s increasingly reckless behavior, Ms Richards said in her lawsuit. In 2020, as the offer approached, LoanDepot paid its executives what it described in regulatory documents as “a one-time and special discretionary bonus”. Mr. Hsieh received $ 42.5 million, and other senior executives have won cash bonuses ranging from $ 9 million to over $ 12 million.
Ms Richards, who said she was demoted in November and excluded from this special bonus round, resigned in March. Her lawsuit seeks compensation for unpaid premiums and forfeited shares which she says were worth at least $ 35 million.
LoanDepot is at the forefront of a group of online newbies who are using technology to speed up and simplify mortgage lending. Last year, it issued nearly 300,000 – twice as many as a year earlier – and was the country’s fourth-largest mortgage provider in dollars loaned, according to iEmergent, which tracks industry data.
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Mr. Hsieh has a long history of prioritizing growth and regularly adds new incentives and products to his company’s lineup. “We will never be a happy or resting company,” he told analysts on a conference call last month. Some workers have said they appreciate the intensity and opportunities of the big paychecks, but complaints about overwhelming workloads, high turnover and burnout are common among former employees.
Ms. Richards’ complaint describes the company, which she joined in 2018, as having a ‘misogynistic’ frat house ‘culture, where harassment was rife and top sellers were celebrated at wild parties that sometimes involved drugs and prostitutes.
In 2019, a senior LoanDepot woman accused a male executive of sexually assaulting her at a company party on Mr. Hsieh’s boat; Ms Richards, who was not present at the event, was asked to lead the investigation because male company officials, including her head of human resources, did not want him, her lawsuit said. (She said she learned that the two employees were drunk and disagreed as to whether the meeting was consensual.)