The
named
officials
at
the
now-defunct
lender
include
former
chief
financial
officer
Christopher
Wright,
former
president
and
chief
production
officer
Shea
Pallante,
and
former
chief
credit
officer
Elliot
Salzman.

“Plaintiffs
have
had
four
opportunities
over
the
course
of
more
than
two
years
to
plead
a
viable
case,”
U.S.
Magistrate
Judge
Lee
Dunst
wrote,
noting
that
the
latest
complaint
is
vague,
overly
broad
and
fails
to
specify
the
role
of
each
executive.

The
35-page
recommendation
was
decided
on
June
13,
according
to
FindLaw.com.

NMN
also
reported
that
neither
Sprout’s
ex-CEO,

Michael
Strauss,
nor
the
company
itself
have
responded
to
the
employee
lawsuit
and
were
not
recommended
for
dismissal.

Sprout
—
a
Long
Island,
New
York-based
non-QM
lender
—

abruptly
closed
in
July
2022
after
rising
mortgage
rates
left
it
with
unsellable
loans.
Hundreds
of
workers
were
allegedly
not
given
their
final
two
paychecks
or
severance.

HousingWire

previously
reported
that
Sprout
retroactively
canceled
health
insurance
in
May
2022,
which
prompted
multiple
lawsuits.
More
than
100
former
employees
sued
that
summer,
but
the
case
has
seen
multiple
twists,
including
a
failed
settlement
and
several
amended
complaints.

Strauss
previously
paid
a
$2.45
million
federal
fine
in
2009

tied
to
the
collapse
of

American
Home
Mortgage,
and
he

lost
his
origination
license
in
Illinois
in
2023
after
attempting
to
launch
another
mortgage
venture.