Citizens Bank sued SoFi last week, accusing the digital lender of poaching 30 mortgage-focused employees since 2024.
The hires have affected business in nine states, Providence, Rhode Island-based Citizens alleged. But the lawsuit, filed Wednesday in the U.S. District Court for the District of Connecticut, focuses on two groups of employees.
Citizens asserts that SoFi “strategically orchestrated” the resignations of nine Connecticut-based Citizens employees in June, “effectively annihilating” the branch where they worked.
When Michael Daversa, a mortgage market manager, resigned from Citizens on June 12, he told the bank “he had no idea” whether any other employees were leaving with him, Citizens said in the lawsuit. However, six colleagues on Daversa’s team resigned within 49 minutes, and two more resigned later that day, the bank said.
Further, Citizens argues that it found, during a review, that Daversa has contacted multiple Citizens employees, touting SoFi’s ability to “get ahead of the pack.” The bank also said Daversa confirmed that at SoFi he would “work with familiar faces.”
Days before his resignation, Daversa sent screen shots of Citizens client lists to his personal email account, the bank argued. One colleague attempted to upload a spreadsheet of confidential client data, contacts and real estate agent referrals, Citizens said. A loan pipeline report was printed on the day of the resignations, the bank said.
In all, the Connecticut employees who left Citizens for SoFi in June accounted for more than $400 million in closed loans that generated roughly $5 million in revenue in the previous year, Citizens said. That represents 70% of the branch’s mortgage producers and 80% of mortgages, the bank said.
The June departures, Citizens contended, “essentially eliminated” the bank’s market presence in Connecticut. Citizens has lost three additional Connecticut-based employees to SoFi since the initial migration, the bank said.
“Rather than build a business unit on its own or engaging in an arm’s-length transaction to acquire a valuable business unit that Citizens had built, SoFi has stolen the fruits of Citizens’ efforts,” Citizens wrote in its lawsuit.
A spokesperson for San Francisco-based SoFi, however, called the lawsuit “a baseless allegation and a clever attempt to prevent Citizens employees from pursuing career opportunities elsewhere.”
“We lawfully compete to recruit and retain the best talent and expect other organizations to do the same,” the spokesperson said in a statement seen by Banking Dive.
Citizens is accusing SoFi of obtaining and using trade secrets without authorization, interfering with Citizens’ employment contracts and customer relationships, and helping former employees violate their noncompete clauses. Perhaps most strikingly, Citizens called SoFi’s alleged theft of trade secrets part of a “pattern of racketeering activity.”
Throughout the lawsuit, Citizens has several colorful descriptions of the bank’s view of SoFi’s actions, such as: “choreographed misconduct”; “reckless indifference”; and “unscrupulous and oppressive.”
Citizens also called it a “well-established modus operandi” and cited another mass migration of talent to SoFi. In August 2024, a Texas-based, then-head of consumer lending left Citizens for SoFi, which would go on to hire 11 more employees from Citizens’ Texas mortgage department, “effectively handicapping Citizens’ ability to operate its mortgage department in the southwest region.”
SoFi has argued Citizens has produced no evidence that the company provided any incentive for ex-Citizens employees to violate their contracts.
Citizens, for its part, asserted it has sent cease-and-desist letters to the Connecticut employees who left. But the bank said it did not receive a response from its former workers or from SoFi.
SoFi has until Sept. 30 to respond to the lawsuit.
Facts Only
* Citizens Bank filed a lawsuit against SoFi in the U.S. District Court for the District of Connecticut.
* Citizens alleges SoFi poached 30 mortgage-focused employees since 2024.
* Nine Connecticut-based employees resigned in June 2024.
* Six members of Michael Daversa's team resigned within 49 minutes on June 12; two more followed later that day.
* Citizens claims Daversa sent screenshots of client lists to a personal email before resigning.
* The June departures in Connecticut represented 70% of mortgage producers and 80% of mortgages at that branch.
* The Connecticut departures accounted for over $400 million in closed loans and roughly $5 million in revenue in the previous year.
* Eleven employees from Citizens' Texas mortgage department joined SoFi following the departure of a head of consumer lending in August 2024.
* Citizens sent cease-and-desist letters to the former Connecticut employees.
* SoFi's deadline to respond to the lawsuit is September 30.
Executive Summary
Citizens Bank has filed a lawsuit in the U.S. District Court for the District of Connecticut against SoFi, alleging the digital lender orchestrated the poaching of approximately 30 mortgage-focused employees. The legal action centers on two primary clusters of departures: a significant migration of Connecticut-based staff in June 2024 and a subsequent wave of departures from a Texas mortgage department in August 2024. Citizens claims these actions were a strategic effort to dismantle its market presence, citing evidence of confidential client data being transferred to personal emails and the rapid, simultaneous resignation of entire teams.
SoFi denies these allegations, characterizing the lawsuit as a baseless attempt to restrict employees from seeking new career opportunities. They maintain that their recruitment practices are lawful and competitive. While Citizens has accused SoFi of trade secret theft and racketeering, SoFi argues there is no evidence of incentives provided to employees to violate their existing contracts. The court response from SoFi is due by September 30.
Full Take
The strongest version of this narrative is a case of predatory corporate raiding. If the evidence of synchronized resignations and the transfer of client lists is verified, this represents a calculated strike to acquire a competitor's market share and intellectual property without paying the acquisition premium associated with an arm's-length transaction.
This situation is framed through a clash of two competing corporate philosophies: the "Right to Talent Mobility" versus "Protection of Proprietary Infrastructure." SoFi frames the event as a victory for employee agency and a free market for talent. Citizens frames it as a systemic theft of "the fruits of effort." The use of high-intensity language—"annihilating," "racketeering," and "choreographed misconduct"—indicates a strategy by Citizens to move the conversation from a simple contract dispute to a moral and criminal failure.
Patterns detected: none
The root cause is the tension between the agility of digital-first lenders (SoFi) and the established infrastructure of traditional banks (Citizens). This echoes a historical pattern where disruptive firms "strip-mine" the human capital of legacy institutions to rapidly scale their own operations. The benefit goes to the migrating employees (likely through higher compensation) and SoFi (through instant market penetration), while Citizens bears the operational cost and loss of revenue.
If this narrative were a coordinated influence campaign, the playbook would involve leaking selectively edited internal emails to paint the opposing firm as "evil" or "predatory" to trigger regulatory scrutiny. The actual content remains a standard reporting of legal filings and corporate responses.
Bridge Questions:
1. At what point does aggressive recruiting cross the legal line into "orchestrated" interference?
2. How does the shift toward digital lending change the value of "client lists" compared to traditional banking relationships?
3. Would the outcome change if the employees had moved to another traditional bank rather than a digital lender?
Counterstrike Scan: Clean.