The ousted founders of CertusBank in Greenville, S.C., have filed a new lawsuit against a hedge fund investor.
The latest lawsuit, filed Friday in the U.S. District Court in Atlanta, claims that Benjamin Weinger of the hedge fund 3-Sigma Value Opportunities spread lies to get three of Certus' founding executives fired.
Weinger "waged a campaign of misinformation, half-truths and lies against the plaintiffs to convince fellow investors and a majority of the CertusBank board... to remove the plaintiffs from their jobs and destroy their business and personal reputations," the new complaint alleges.
The lawsuit was filed the same day that a U.S. district court judge in South Carolina dismissed a prior complaint that had alleged that Weinger conspired with the CertusBank board to libel the company's founders and seize control. While the first lawsuit was filed against Weinger and the bank, the second lists only Weinger and his fund as defendants.
The three former Certus executives -- Milton Jones, Walter Davis and Angela Webb -- were fired in April, shortly after American Banker published an article focusing on the bank's large losses and allegations of mismanagement. Certus, founded in 2011 with $500 million in hedge fund capital, lost nearly $100 million the last two years, and investors had questioned the executives' unusually high spending, particularly payments of millions of dollars in consulting fees to a firm they themselves owned.
The executives claim that all the expenses, as well as the payments to the consulting firm, were approved by Certus' board.
In their latest lawsuit, the executives allege that Weinger and his fund leaked "internal bank information to the American Banker, knowing full well that their toxic accusations of halftruths, misstatements and lies would damage and undermine the plaintiffs' ability to lead the bank into the future."
The first defamation lawsuit accused Certus' board and Weinger of engaging in a racist conspiracy against the defendants. Certus denied the claims in that lawsuit, arguing that the executives were fired for poor performance and that most of the directors who voted for the firings are African-Americans, as are the three founders.
The judge tossed out that case after determining that it did not meet the criteria to be heard in a federal court. It was dismissed without prejudice, which means that it can be re-filed in another court.