Bank of America Whistleblower Wins Big Time

Updated to include statement from Bank of America.

NEW YORK (TheStreet) -- Bank of America (BAC) was fined $930,000 and ordered to reinstate a Los Angeles-based employee after the U.S. Department of Labor found it violated the whistleblower protection provisions of the Sarbanes-Oxley Act.

The employee, who was not named in the Department of Labor's press release announcing the penalties, originally worked for Countrywide Financial Corp., which was acquired by Bank of America in 2008.

The fine includes back wages, interest, compensatory damages and attorney fees, according to the DoL.

The employee was in charge of "internal investigations that revealed widespread and pervasive wire, mail and bank fraud involving Countrywide employees," the press release stated. "The employee alleged that those who attempted to report fraud to Countrywide's Employee Relations Department suffered persistent retaliation. The employee was fired shortly after the merger."

Bank of America will challenge the order, according to spokeswoman Shirley Norton.

"The bank's actions to dismiss were solely based on issues with the employee's management style and in no way related to the employee's complaints and the allegations made in the complaint," Norton wrote via email, adding that "Bank of America encourages associates to raise issues they see...[and]...thoroughly investigated the claims made in this case while the associate was still employed and took the appropriate action."

The action is the latest headache for Bank of America from its ill-fated acquisition of Countrywide--a $4.2 billion deal that has cost the bank about $25 billion, according to a "back of the envelope" calculation by FBR Capital Markets analyst Paul Miller in July.

-- Written by Dan Freed in New York.

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