Bofl Holding (BOFI) Issues Statement on Short-Seller 'Hit Pieces'
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BofI Holding, Inc. (NASDAQ: BOFI) provided comments on recent volatility in its stock price. The Company continues to be the target of anonymous short-seller hit pieces designed to manipulate the market in a veiled effort to benefit themselves at the expense of BofI’s shareholders. Upon a closer examination, these anonymous pieces are based on speculation, innuendo, and outright misrepresentations. The latest hit piece, posted on a blog, claims that a “recent” lawsuit raised new allegations against BofI. In fact, this lawsuit is old news. Back on October 15, 2015, known “repeat player” strike suit attorneys filed a securities class action against BofI. An amendment to this old lawsuit has now been filed. After months of harassing our ex-employees, the lawyers’ amendment fails to raise any credible or systemic problems at BofI.
The amendment adds some unsubstantiated stories from “confidential” ex-employees mostly criticizing and complaining about the alleged lack of manners of their managers. The amended complaint also incorporates the anonymous blog posts of admitted short sellers, referring to them as “articles”, as if they were factual and unbiased. Just like the initial complaint, the amended complaint is riddled with numerous and material factual inaccuracies, erroneous conclusions, and mistaken applications of legal standards, which will be addressed in court.
What the anonymous short-sellers and the strike suit attorneys fail to highlight is that BofI, like other banks, is regularly examined by its federal regulators, external auditors, and internal auditors. The absence of public enforcement actions highlight how disconnected these allegations are from the reality of BofI’s highly compliant and top-performing business.
Additionally, the Audit Committee of the Board of Directors engaged one of the largest law firms in the world to conduct an independent investigation to determine whether there is support for the factual allegations and the conclusions contained in the employment action that formed the basis for the initial class action. After an extensive investigation, the outside law firm advised the Audit Committee that, based on its investigation, it found no support for the conclusions in the employment complaint that the Bank or management engaged in wrongdoing or acts of fraud or impropriety.
Moreover, BofI’s continued best-in-class asset quality metrics, including industry leading charge-off ratios, and low non-accrual loans are indicative of BofI’s strong underwriting standards.
BofI will vigorously defend itself and will continue to focus on delivering positive earnings growth and maintaining our strong regulatory relationships and risk-focused culture.
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