A wrongful termination suit filed against Banc of California Inc. alleges that the company illegally inflated its profits, that it had a culture of sexual harassment and that corporate money was spent in strip clubs, court documents show.
The complaint was filed in L.A. Superior Court on Dec. 7 by Heather Endresen, who was a managing director for Small Business Administration lending before she alleges she was wrongfully terminated in May. The plaintiff has not yet named any specific individual defendants in the complaint and plans to amend the suit to name them as she ascertains who they are.
Endresen alleges that J. Francisco Turner, the bank's interim CFO from September 2016 to June 2017, pressured female employees to have sex with him. She also alleges that he used illicit drugs at the office and pressured employees to do so.
In a statement provided to S&P Global Market Intelligence via his PR representative, Turner said he will not comment on pending legal matters, "particularly since there are no claims against me personally."
"I vigorously dispute the allegations made about me and am confident that I will be vindicated once the legal process takes its course," Turner's statement read.
The lawsuit also accuses the company of improperly carrying over revenues from 2016 due to the reversal of accrued bonuses, which inflated its profitability. Endresen alleges she was forced to quit her job and that the defendant breached its financial obligations to her by not paying out her earned bonuses. She alleges that the defendant retaliated against her for her complaints of illegal conduct.
In an emailed statement, the company said the complaint is without merit and it plans to defend itself.
"[W]e treat all matters of compliance with the utmost seriousness and any suggestion otherwise is categorically wrong," the company stated. "We encourage all employees to raise any area of concern and we investigate all claims thoroughly."
Aurelius Value, which has a short position in the company, posted screenshots of the allegations on social media on Dec. 8 and media outlets reported the allegations around midday. Banc of California's stock was down 4.02% as of 1:52 p.m. ET.
Banc of California CEO Steven Sugarman resigned in January amid accusations that several company senior executives and board members had ties with Jason Galanis, who in 2016 pleaded guilty in federal court to market manipulation and several counts of fraud.
When Turner left the company in June, a press release attributed his departure to his plans to pursue "financial technology, venture investing and other interests."