Customers Bancorp has accused its former chief digital officer, Christopher Smalley, of divulging confidential information about the bank in exchange for cash, court documents show.

Smalley received $1,000 per hour to disclose confidential information on Customers’ instant payments platform, its risk mitigation strategies and details of confidential business negotiations to market intelligence platform Tegus, which the bank said has since been sold to investment and banking professionals “whose perceptions of [Customers] will be negatively impacted.”

Smalley, who left the bank last year and allegedly conducted the interview with Tegus last month, breached his contract when divulging information to the firm and made “numerous false and defamatory” statements, the bank alleged.

While Smalley is not named in the eight-page interview with Tegus included in court documents – the interviewee is identified as Customers’ former chief digital officer and as Bank of New York Mellon Corp.’s senior director, head of partnerships, which aligns with the current position listed on Smalley’s LinkedIn page.

In one comment to Tegus, Smalley is quoted as saying Customers “basically bust[s] [executives] out of the bank largely to avoid paying.” 

“It’s an incredible pattern. That’s very strange. And I think most typified by just last quarter firing the long-tenured CFO for cause to avoid paying her severance,” Smalley is quoted as saying.

Customers, within weeks, recharacterized the CFO’s departure as “separation by mutual agreement.”

In another comment, Smalley allegedly told Tegus, “The familial ties are shocking and not good governance[.] ... They keep it all in the family. It’s just not good governance. Anyone who’s taken their first class in business ethics would just be, ‘These [sic] are just gross violations of basic processes.’”

Jay Sidhu serves as executive chair of Customers Bancorp. His son, Sam Sidhu, is vice chair, president and CEO.

Smalley allegedly told Tegus that Customers let him go to appease regulators, who, at the time, were taking an interest in banks’ crypto dealings.

“I was seen as the crypto guy, and they wanted to fold digital assets into the broader commercial bank as a way to insulate it, make it less salient – certainly from the regulators' perspective but also from investors' perspectives,” he told the interviewer, according to court documents.