The ex-chief compliance officer at a California-based money transmitter that serviced the cannabis industry is suing her former employer alleging wrongful termination and whistleblower retaliation over lax disclosures related to an acquisition.

Cynthia Galas served as CCO at Payqwick from February 2022 to late April, according to a complaint filed in Los Angeles County Superior Court earlier this month.

During her employment, Galas was responsible for disclosures to the California Department of Financial Protection and Innovation (DFPI). At the time, Payqwick was planning to be acquired by cannabis financial technology company Green Check Verified (GCV). The deal required proper disclosure and approval by the DFPI.

In September 2022, GCV announced via press release the pending deal. Payqwick had not notified the DFPI despite Galas’s repeated warnings, according to the complaint.

When Galas was given the OK to inform the DFPI, the regulator said the deal would need written approval and would take six to nine months, the complaint stated.

In January, the DFPI sent follow-up questions regarding Payqwick’s management structure post-acquisition. During a meeting with Galas on how to respond, Payqwick’s chief executive allegedly suggested the company claim no changes would be made but “surreptitiously make personnel changes after … obtaining DFPI approval of the acquisition and after the acquisition takes place,” the complaint stated.

Galas, along with Payqwick’s founder, objected, per the complaint. The company reached a consensus to disclose certain changes to its board of directors.

In April, Galas received an email from the CEO asking her to resign her position pending rehiring by GCV. Galas responded by asserting previous disclosures to the DFPI guaranteed there would be no changes to the management team, per the complaint.

“’[A]s a compliance person I need to understand the whole picture better, because right now it does not seem clear to me, especially from a legal standpoint,’” Galas said, according to the complaint.

Later that month, an agent from the DFPI contacted Galas to inform her Payqwick had “‘tried to pull the rug out’” from under him by asking to make changes to its application regarding management structure, per the complaint. He informed the company a new application would be required if changes were made.

That same day, Payqwick terminated Galas, according to the complaint.

The lawsuit seeks compensatory and punitive damages, interest, attorney’s fees, and costs of suit, among other relief.

GCV did not respond to a request for comment.

Jeff Dale is Managing Editor, Editorial Projects and Analytics, at Compliance Week. He previously served as Compliance Week's Digital Editor and has worked as a copy editor at the Boston Herald and city editor at The Hour Publishing Co. in Norwalk, Conn.View full Profile

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