As reported by Reuters, the 2nd Circuit Court of Appeals in New York has ordered the federal district court to revisit a whistleblower lawsuit against Wells Fargo filed by former employees who allege they were fired after seeking to report misconduct by lenders that Wells Fargo later absorbed. The alleged misbehavior predates Wells Fargo’s massive fraudulent accounts scandal and follows recent Supreme Court jurisprudence that makes it easier for some whistleblower lawsuits to move forward.

The former employees claim their employer lenders hid significant mortgage improprieties along with billions in losses, enabling the lenders — and Wells Fargo — to falsely claim there were in compliance with banking law and to subsequently get favorable rates on aid from the Federal Reserve.

The U.S. Supreme Court ruled in 2016 that some courts were making it improperly difficult for plaintiffs to pursue Fraud-on-the-Government claims under the False Claims Act, noting that whistleblowers should be able to sue over misrepresentations “material to the government’s payment decisions.”

The case is U.S. ex rel. Bishop et al. v Wells Fargo & Co et al., 2nd U.S. Circuit Court of Appeals, No. 15-2449.

Read the full article on