NEXA Mortgage, LLC., the nation's largest mortgage broker, is suing its former director of training, Kristine Wake, over her alleged solicitation of NEXA employees, misappropriation and retention of NEXA’s trade secrets and confidential business information, including documents and information regarding NEXA’s Mortgage Academy Training Program.
The plaintiff, NEXA, also claims Wake has been holding the domain name for its loan officer training website, “WhyNexaAcademy.com,” hostage. Wake allegedly demanded an $18,000 payment in exchange for releasing the domain to NEXA.
In the complaint, filed in an Arizona federal court on May 2, the plaintiff accuses Wake of violating 15 U.S.C.§ 1125(d), the Anti-Cybersquatting Consumer Protection Act, and various common law claims including breach of contract, breach of duty of loyalty, unfair competition, and misappropriation of trade secrets.
“NEXA supports its loan officers,” said Garris Horn Attorney James Brody, who represents the plaintiff, NEXA Mortgage. “And when someone wants to leave and they come at it in a direct way. I've known [Kortas] to always be supportive. However, when this type of thing happens, it's obviously a problem now.”
Brody added that Wake has yet to be served and could possibly be evading service, but said "it should happen here pretty soon."
The lawsuit also names other unidentified NEXA employees as defendants, sued as “DOES 1 through 25, inclusive,” but does not clarify what their connection is to Wake and her transition out of the company. The complaint states that NEXA is ignorant as to the true names and capacities of defendants, but plans to amend the complaint with the true names and capacities of said DOE defendants along with any appropriate charging allegations.
Wake was hired by NEXA in 2020 as an Outside Loan Officer, pursuant to an Outside Loan Officer Employment Agreement, which was later replaced and superseded by an Outside Loan Officer Agreement dated February 7, 2024, according to the complaint. The agreement bars Wake from using NEXA’s confidential information for her own benefit or for the benefit of any third-party, as well as soliciting NEXA employees or interfering with NEXA's business.
While employed, Wake developed the training and procedures used for NEXA’s Mortgage Academy Training Program, which covered topics such as marketing, generating referrals, pricing, and guidance on various phases of the mortgage application and approval process.
NEXA Mortgage, which currently sponsors over 3,000 loan officers, claims Wake decided to launch her own competing business “NEXXT LEVEL Mortgage” in September 2024. The former director allegedly solicited 12 of NEXA's employees while still employed by NEXA.
“Having developed the training modules and procedures, WAKE was well aware of the confidential nature of the Academy and its value to NEXA,” the complaint reads. “Nevertheless, WAKE took the confidential materials with her when she left the company and, upon information and belief, is using the training program developed under NEXA’s umbrella for her own benefit and/or that of her new employer.”
The plaintiff also claims that Wake “ironically” asked the employees to sign a Non-Disclosure Agreement (“NDA”) in connection with her alleged solicitation and related discussions to protect her own confidential information.
NEXA suspended WAKE and ultimately terminated her employment due to her alleged misconduct and breaches of the obligations set forth in her Outside Loan Officer Agreement.
Following the termination of her employment with NEXA, Wake was hired by Platinum One Lending, LLC, which is owned by NEXA’s co-founder and former president, Matt Grella. Grella was also terminated by his co-founder and CEO Mike Kortas in 2024.
In April 2024, Grella filed a lawsuit against Kortas, accusing him of misappropriating funds to purchase luxury aviation. A countersuit was subsequently filed by Kortas.
However, the plaintiff accuses Wake of continuing to wrongfully use NEXA’s confidential and competitive business and training information to this day, for her own benefit and for the benefit of her employer.
The complaint adds that “Wake has further breached her contractual obligations by soliciting and/or attempting to solicit a dozen NEXA employees to join Platinum One, after her efforts to start and manage NEXXT LEVEL MORTGAGE failed.”
Additionally, the plaintiff claims that Wake registered the domain “whynexaacademy.com” as part of her job responsibilities with NEXA, but she registered the domain name in her own name. NEXA argues that Wake’s registration and later refusal to turn over the domain name constitutes an act of cyberpiracy prohibited by 15 U.S.C.§ 1125(d).
"[NEXA's training academy] is a specific value-add to NEXA because it's a value-add to its loan officers," Brody said. "And the value of any mortgage company is the people there, the loan officers, the producers.It's not in the business of selling the widgets. It's in the business of attracting training and supporting top talent."
"She had a position of trust," Brody continued. "Everything that she had done while she was with NEXA and receiving the support of NEXA, [were] efforts that were being done in furtherance of the company. So for her to go ahead and take anything, much less to hold these things hostage is something that is wrongful."
Due to Wake’s alleged misconduct, NEXA claims it has incurred and continues to incur damages in amounts that exceed $75,000. Therefore, NEXA requests from the Court an order compelling the defendant to turn over the domain name and relief for compensatory, contractual, and actual damages in an amount to be proven at trial — but no less than $75,000.
Defendant, Wake, did not immediately respond to NMP's request for comment.
Update 05/12: The article previously stated that NEXA's countersuit against co-founder, Mat Grella, was dismissed. However, the countersuit was refiled shortly thereafter and is currently pending litigation.
