Interesting, shares up 11% after hours right now.
Neil
Interesting, shares up 11% after hours right now.
After listening to the Q&A (I missed the prepared remarks), I bet the share price is going to be WAY back up tomorrow (glad I got mine already today).
Ok, Charlie you have piqued my interest. I’m gonna listen to the replay when it is available.
I sold about 3/4 of my position a few weeks back. For me the uncertainty and therefore the risk here has just increased to a level where I am not comfortable for the time being.
I’m erring on the side of caution with this one. Hopefully, I get a better feel after the call. But I am getting faint flashbacks of my experience with EBIX where every time a short attack came people were defiant and the CEO refuted them. In the end, it well, didn’t end well. EBIX stock has recovered some since the bottom, but still below where I sold it some 3 or so years ago.
I’m not saying that’s whats going on here but there’s been a lot of smoke here lately and the more animated the defense the more I wonder if there is in fact something lurking in the shadows we don’t know about.
hope i’m wrong…and maybe I will have a different sense after hearing the call. i also have another sense that there may be many (outside this community) that feel the BOFI story is almost too good to be true – as in, what’s the catch?
If there is an ounce of truth to any of the recent claims, I worry about the outcome. So I reduced my position a few weeks back.
again, i hope i am wrong, but I’m probably not the only one who is concerned or unsettled. if you feel as i do – say it with me –
“it’s O-K.” 
Don’t be talked into buying more if you’re not comfortable with the situation.
best,
michael
long BOFI
3 Likes
I had a very small starter position (purchased last year at ~$76), and I decided to add to the position at the end of trading today. I happened to get a bit more at $100. I don’t usually buy on a panic trade, but I just couldn’t resist today. The info coming out just didn’t seem like it would turn out to be valid.
Nevertheless, I could be wrong.
However, with the recent slide of the share price and my new shares, my total position is now less than 2% of my non-cash Roth.
I’m comfortable with that, waiting to see if there’s any fire to the smoke.
My initial thought is, “No.” But just as the plaintiff could be “mis-representing” the facts, so too could the CEO. It could easily be a case of “methinks he doth protest too much.” Then again, it could just as easily be a case of the CEO thinking, “Geez, can you believe what we’re having to put up with from this guy?? I’m incensed and flabbergasted!” We won’t know the truth of it all for some time. But I lean toward accepting that this is an attack out of left field for its own purposes, and that BOFI will be vindicated.
However, with a small position, I’m willing to let it ride and wait to find out.
I know from experience at work that lawsuits don’t always have validity, and that some attorneys will file on anything that moves. Not all. But some.
Ambulance chasers will. I discount all the add-on lawsuits completely.
Best regards,
Kathie
Great transcript notes Neil. CEO is so adamant, certain and specific that he is either Ken Lay of Enron, or he is telling the truth. My confidence is raised and I will probably buy more in the morning even after it is up 10%.
1 Like
FWIW, the call wasn’t just denials, but actually tearing apart the allegations and showing why they’re wrong. For example, there’s the infamous “spreadsheet” allegation that was front-and-center in the NYT piece. Here’s the actual allegation direct from the complaint:
32. On or about January 15, 2015, the Bank’s principal regulator, the OCC (Office of the Comptroller of the Currency) requested information on Bank accounts with no Tax Identification Numbers (“TIN’s”). The Bank responded to the OCC that there were no accounts without TIN’s. This was knowingly false, as Plaintiff saw a spreadsheet in the BSA (“Bank Secrecy Act”) folder disclosing approximately 150-200 accounts where the borrower does not have a TIN.
On the call today, the CEO explained that there were two requests from the OCC regarding this, one for deposit accounts (mentioned in the complaint) and then a broader one that included loans as well. Loans are not accounts in bank-speak. BOFI had no deposit accounts that lacked TINs, and that’s how they responded to that specific request. They did have loans without TINs, and they provided the list of them (from the referenced BSA folder) to the OCC for the broader request that included loans. The spreadsheet in the BSA folder the plaintiff saw was for the loans, and that was given to the OCC as part of the bank’s response to the second request. But the plaintiff apparently wasn’t aware that there were multiple requests, and just saw the response to the first one about the deposit accounts and made a bunch of wild assumptions (assuming he’s not intentionally trying to mislead and profit). And the key thing is that the bank did provide the list of people lacking TINs to the OCC.
The call overall is excellent, and I think the CEO did a great job debunking the allegations: not just denying them with a lot of bluster and outrage, as one often sees, but actually tearing them apart and explaining in detail exactly why they were inaccurate. The plaintiff was a junior auditor who either didn’t understand his job (which sounds likely, at least in part: he was only doing 25% of the work of his team members and clearly was confused about some basic things) or is trying to intentionally profit from this.
And remember, regulators just poured over BOFI during the H&R block transaction, and were aware of all of these allegations at the time (as was BofI’s external auditor for their annual report, which they signed off on). The plaintiff made the allegations to regulators during the review. The CEO explicitly confirmed this in the call, and even the plaintiff acknowledges in his complaint that he told regulators at least 6 months ago and they’ve decided to take no action:
Plaintiff timely filed complaints with federal agencies including the United States Department of Labor, Occupational Safety and Health Administration, and the SEC. More than 180 days have elapsed since filing those complaints. Plaintiff has therefore exhausted his administrative remedies.
I personally don’t see any smoke, but rather a short attack that is either in league with, or taking advantage of, an incompetent and disgruntled junior auditor. The fact that multiple regulators and an external auditor have reviewed these allegations and had no issues is huge IMHO.
Incidentally, two of the bank’s internal auditors left, and the other (senior) one made zero allegations of wrong doing. He was the plaintiff’s supervisor, and basically left because the plaintiff was such a disaster (poor performance, accessing payroll data without authorization and distributing it other employees, leaking material non-public information to short sellers and the media, abrasive, etc).
Everyone should do what they’re comfortable with, of course, but I do think it’s absolutely worth listening to the call before coming to any conclusions. Otherwise you’re only hearing one side, and it’s the side looking to profit from spreading fear and confusion.
Just my 2 cents, of course.
Neil
Long BOFI
28 Likes
Wow. I added more on the dip today. Also, below are the October and November option chains, October options expire on Friday of this week, 2 days from today.
Look at the massive Open Interest on the October puts (that is the amount of contracts already open at the start of the trading day), and also the daily volume, which is the total contracts traded today (can be new contacts opening or contracts closing)
October puts are massively higher than everything, both in todays volume, which I would expect on the move, but also in the high OI to start the day is curious. Even if you look out to future months, it is so out of whack. Someone knew something.
October Calls
Strike Price Change Bid Ask Volume Open Int
45.00 96.22 0.00 53.30 56.50 - 1
50.00 58.00 0.00 48.20 51.60 - 4
55.00 - - 43.10 46.70 - 0
60.00 73.50 0.00 38.50 41.70 - 4
65.00 - - 33.30 36.80 - 0
70.00 60.20 0.00 28.40 31.90 - 22
75.00 42.00 +2.00 23.90 27.20 1 1
80.00 33.70 -6.70 19.30 22.60 2 21
85.00 25.10 -19.94 14.80 18.00 2 20
90.00 23.30 -27.86 10.60 13.90 5 28
95.00 8.39 -37.98 7.20 10.00 62 70
100.00 5.90 -36.40 4.10 5.00 58 102
105.00 11.30 -24.80 2.50 5.00 35 290
110.00 2.20 -28.28 1.00 3.10 235 91
115.00 0.70 -27.10 0.30 0.85 236 197
120.00 0.40 -22.29 0.25 0.45 266 291
125.00 1.00 -16.40 0.10 0.35 327 524
130.00 0.20 -12.43 0.10 0.30 57 658
135.00 0.10 -6.90 0.05 0.10 398 94
140.00 0.15 -2.25 - 0.05 17 289
145.00 1.25 0.00 - 0.05 - 89
150.00 0.35 0.00 - 0.05 - 26
155.00 0.70 0.00 - 0.05 - 11
160.00 0.05 -0.25 - 0.05 10 7
October Puts
Strike Price Change Bid Ask Volume Open Int
45.00 0.11 0.00 0.10 0.05 - 2
50.00 0.05 0.00 - 0.35 15 0
55.00 0.10 -0.40 - 0.15 68 1
60.00 0.25 -0.05 - 0.25 3 24
65.00 0.05 -0.45 - 0.65 3 58
70.00 0.55 -0.15 0.15 0.60 239 5715
75.00 0.80 +0.70 0.65 0.85 537 2259
80.00 1.05 +0.85 0.95 1.05 569 2147
85.00 1.50 +1.35 0.80 1.70 223 266
90.00 2.00 +1.55 1.85 2.55 198 369
95.00 3.50 +3.30 3.10 4.00 413 281
100.00 5.60 +5.40 5.50 6.10 1150 2590
105.00 6.90 +6.85 6.90 9.00 951 821
110.00 9.00 +8.60 11.40 12.70 128 216
115.00 14.15 +13.90 14.20 17.00 451 474
120.00 15.30 +15.10 18.80 21.90 63 226
125.00 13.90 +13.65 23.70 26.50 86 84
130.00 21.48 +21.28 28.60 31.30 14 80
135.00 33.80 +33.40 33.60 36.50 113 116
140.00 32.45 +31.25 38.50 41.70 6 34
145.00 5.40 0.00 43.50 46.70 - 20
150.00 45.40 +35.79 48.50 51.70 30 20
155.00 - - 53.50 56.70 - 0
160.00 - - 58.60 62.40 - 0
November Calls
Strike Price Change Bid Ask Volume Open Int
75.00 - - 25.60 28.90 - 0
80.00 - - 21.60 24.60 - 0
85.00 - - 17.60 20.80 - 0
90.00 19.50 -30.97 14.40 17.30 1 1
95.00 16.40 0.00 11.50 13.00 50 0
100.00 10.00 -18.02 8.80 10.30 101 2
105.00 7.00 -4.50 6.40 7.80 114 0
110.00 5.00 -4.50 4.50 6.40 73 0
115.00 4.00 -21.30 3.40 4.10 47 2
120.00 2.50 -22.70 2.30 3.00 132 0
125.00 2.00 -18.51 1.20 3.60 82 17
130.00 1.75 -11.60 0.90 3.20 13 20
135.00 0.80 -11.33 0.25 2.55 49 43
140.00 0.65 -8.06 0.30 1.25 85 111
145.00 0.45 -4.35 0.30 0.90 22 63
150.00 0.35 -3.05 0.10 1.45 4 63
155.00 0.25 +0.10 - 1.20 6 0
160.00 - - - 3.40 - 0
165.00 0.20 0.00 - 3.20 - 1
170.00 - - - 4.20 - 0
175.00 - - - 4.80 - 0
November Puts
Strike Price Change Bid Ask Volume Open Int
75.00 2.50 +2.00 1.10 2.75 68 2
80.00 2.50 +1.25 1.40 3.70 49 0
85.00 3.37 +0.37 2.00 5.00 7 0
90.00 3.50 -0.50 3.40 6.50 620 0
95.00 6.90 +5.70 6.30 8.40 69 15
100.00 7.70 +6.55 8.60 10.70 362 0
105.00 10.00 +8.43 10.70 13.40 165 6
110.00 14.34 +13.24 13.50 16.80 201 12
115.00 15.92 +12.92 17.70 20.40 65 8
120.00 17.90 +16.25 21.00 24.40 17 19
125.00 19.20 +17.03 25.80 28.70 861 86
130.00 24.00 +21.30 29.60 33.20 33 41
135.00 28.25 +24.35 34.30 38.10 4 33
140.00 33.90 +28.70 39.10 42.70 11 21
145.00 8.10 0.00 44.00 47.50 - 1
150.00 38.00 +25.34 48.70 52.20 10 10
155.00 - - 53.80 57.10 - 0
160.00 - - 58.70 62.40 - 0
165.00 - - 63.80 67.10 - 0
170.00 - - 68.70 72.40 - 0
175.00 - - 73.70 77.90 - 0
1 Like
whoops, that table didn't format right. Lets try again. Note the huge outlier in Oct put amounts going into today
October Calls
Strike Price Change Bid Ask Volume Open Int
45.00 96.22 0.00 53.30 56.50 - 1
50.00 58.00 0.00 48.20 51.60 - 4
55.00 - - 43.10 46.70 - 0
60.00 73.50 0.00 38.50 41.70 - 4
65.00 - - 33.30 36.80 - 0
70.00 60.20 0.00 28.40 31.90 - 22
75.00 42.00 +2.00 23.90 27.20 1 1
80.00 33.70 -6.70 19.30 22.60 2 21
85.00 25.10 -19.94 14.80 18.00 2 20
90.00 23.30 -27.86 10.60 13.90 5 28
95.00 8.39 -37.98 7.20 10.00 62 70
100.00 5.90 -36.40 4.10 5.00 58 102
105.00 11.30 -24.80 2.50 5.00 35 290
110.00 2.20 -28.28 1.00 3.10 235 91
115.00 0.70 -27.10 0.30 0.85 236 197
120.00 0.40 -22.29 0.25 0.45 266 291
125.00 1.00 -16.40 0.10 0.35 327 524
130.00 0.20 -12.43 0.10 0.30 57 658
135.00 0.10 -6.90 0.05 0.10 398 94
140.00 0.15 -2.25 - 0.05 17 289
145.00 1.25 0.00 - 0.05 - 89
150.00 0.35 0.00 - 0.05 - 26
155.00 0.70 0.00 - 0.05 - 11
160.00 0.05 -0.25 - 0.05 10 7
October Puts
Strike Price Change Bid Ask Volume Open Int
45.00 0.11 0.00 0.10 0.05 - 2
50.00 0.05 0.00 - 0.35 15 0
55.00 0.10 -0.40 - 0.15 68 1
60.00 0.25 -0.05 - 0.25 3 24
65.00 0.05 -0.45 - 0.65 3 58
70.00 0.55 -0.15 0.15 0.60 239 5715
75.00 0.80 +0.70 0.65 0.85 537 2259
80.00 1.05 +0.85 0.95 1.05 569 2147
85.00 1.50 +1.35 0.80 1.70 223 266
90.00 2.00 +1.55 1.85 2.55 198 369
95.00 3.50 +3.30 3.10 4.00 413 281
100.00 5.60 +5.40 5.50 6.10 1150 2590
105.00 6.90 +6.85 6.90 9.00 951 821
110.00 9.00 +8.60 11.40 12.70 128 216
115.00 14.15 +13.90 14.20 17.00 451 474
120.00 15.30 +15.10 18.80 21.90 63 226
125.00 13.90 +13.65 23.70 26.50 86 84
130.00 21.48 +21.28 28.60 31.30 14 80
135.00 33.80 +33.40 33.60 36.50 113 116
140.00 32.45 +31.25 38.50 41.70 6 34
145.00 5.40 0.00 43.50 46.70 - 20
150.00 45.40 +35.79 48.50 51.70 30 20
155.00 - - 53.50 56.70 - 0
160.00 - - 58.60 62.40 - 0
November Calls
Strike Price Change Bid Ask Volume Open Int
75.00 - - 25.60 28.90 - 0
80.00 - - 21.60 24.60 - 0
85.00 - - 17.60 20.80 - 0
90.00 19.50 -30.97 14.40 17.30 1 1
95.00 16.40 0.00 11.50 13.00 50 0
100.00 10.00 -18.02 8.80 10.30 101 2
105.00 7.00 -4.50 6.40 7.80 114 0
110.00 5.00 -4.50 4.50 6.40 73 0
115.00 4.00 -21.30 3.40 4.10 47 2
120.00 2.50 -22.70 2.30 3.00 132 0
125.00 2.00 -18.51 1.20 3.60 82 17
130.00 1.75 -11.60 0.90 3.20 13 20
135.00 0.80 -11.33 0.25 2.55 49 43
140.00 0.65 -8.06 0.30 1.25 85 111
145.00 0.45 -4.35 0.30 0.90 22 63
150.00 0.35 -3.05 0.10 1.45 4 63
155.00 0.25 +0.10 - 1.20 6 0
160.00 - - - 3.40 - 0
165.00 0.20 0.00 - 3.20 - 1
170.00 - - - 4.20 - 0
175.00 - - - 4.80 - 0
November Puts
Strike Price Change Bid Ask Volume Open Int
75.00 2.50 +2.00 1.10 2.75 68 2
80.00 2.50 +1.25 1.40 3.70 49 0
85.00 3.37 +0.37 2.00 5.00 7 0
90.00 3.50 -0.50 3.40 6.50 620 0
95.00 6.90 +5.70 6.30 8.40 69 15
100.00 7.70 +6.55 8.60 10.70 362 0
105.00 10.00 +8.43 10.70 13.40 165 6
110.00 14.34 +13.24 13.50 16.80 201 12
115.00 15.92 +12.92 17.70 20.40 65 8
120.00 17.90 +16.25 21.00 24.40 17 19
125.00 19.20 +17.03 25.80 28.70 861 86
130.00 24.00 +21.30 29.60 33.20 33 41
135.00 28.25 +24.35 34.30 38.10 4 33
140.00 33.90 +28.70 39.10 42.70 11 21
145.00 8.10 0.00 44.00 47.50 - 1
150.00 38.00 +25.34 48.70 52.20 10 10
155.00 - - 53.80 57.10 - 0
160.00 - - 58.70 62.40 - 0
165.00 - - 63.80 67.10 - 0
170.00 - - 68.70 72.40 - 0
175.00 - - 73.70 77.90 - 0
Jan 2016 Calls
Strike Price Change Bid Ask Volume Open Int
50.00 68.30 0.00 48.70 52.20 - 2
55.00 - - 44.00 47.60 - 0
60.00 55.50 0.00 39.40 43.10 - 5
65.00 31.00 0.00 35.20 38.70 - 10
70.00 39.00 0.00 30.70 34.40 - 2
75.00 - - 26.90 30.40 - 0
80.00 32.50 -24.50 23.20 26.50 4 30
85.00 23.79 -15.71 19.40 22.90 10 14
90.00 54.30 0.00 16.50 19.60 - 100
95.00 37.00 0.00 13.30 15.70 - 14
100.00 13.00 -28.29 11.00 13.90 162 162
105.00 9.40 -28.34 8.50 10.50 127 106
110.00 10.00 -23.50 6.30 8.40 451 156
115.00 6.00 -24.00 5.20 8.00 23 134
120.00 4.90 -19.42 4.10 5.20 23 190
125.00 3.70 -16.90 2.45 4.60 23 71
130.00 2.95 -14.05 1.75 2.70 156 175
135.00 2.50 -10.45 1.05 4.90 6 50
140.00 3.29 -7.51 1.00 4.20 24 69
145.00 8.00 0.00 0.10 4.30 - 64
150.00 1.50 -5.24 0.10 1.95 16 126
155.00 2.50 0.00 0.05 3.00 - 56
160.00 1.00 -1.90 0.20 3.80 3 35
165.00 1.10 0.00 - 3.50 - 15
170.00 0.50 -0.79 - 4.80 5 18
175.00 - - - 4.80 - -
Jan 2016 Puts
Strike Price Change Bid Ask Volume Open Int
50.00 0.25 0.00 0.15 2.00 - 11
55.00 - - 0.05 3.00 - 0
60.00 1.00 +0.60 0.25 2.85 6 24
65.00 0.45 0.00 0.90 3.50 - 13
70.00 3.00 +2.70 1.40 4.30 101 571
75.00 3.80 +2.70 2.50 5.20 100 93
80.00 4.50 +3.40 3.30 5.50 108 28
85.00 6.60 +4.40 4.80 7.70 123 71
90.00 8.50 +7.38 6.00 9.60 123 72
95.00 7.30 +4.85 8.00 11.40 89 115
100.00 9.80 +8.00 10.50 13.90 203 254
105.00 13.85 +11.90 13.20 16.80 230 310
110.00 12.90 +7.20 16.20 19.70 216 1345
115.00 20.15 +16.79 19.50 22.90 16 287
120.00 21.00 +16.20 23.30 26.90 61 228
125.00 4.20 0.00 27.00 30.20 - 48
130.00 5.80 0.00 31.70 34.80 - 59
135.00 22.00 +13.95 35.50 39.00 6 15
140.00 9.30 0.00 40.00 43.70 - 167
145.00 11.80 0.00 44.70 47.80 - 6
150.00 - - 49.60 53.10 - 0
155.00 - - 54.70 58.50 - 0
160.00 - - 59.50 62.40 - 0
165.00 - - 64.00 67.60 - 0
170.00 - - 69.30 72.60 - 0
175.00 - - 73.90 77.60 - -
Apr 2016 Calls
Strike Price Change Bid Ask Volume Open Int
60.00 47.00 -14.70 40.80 44.50 8 5
65.00 50.42 -27.48 36.70 40.30 1 16
70.00 - - 33.10 36.40 - 0
75.00 - - 29.30 32.70 - 0
80.00 29.00 -11.50 25.60 29.10 8 2
85.00 23.90 -4.20 22.00 25.00 8 0
90.00 36.00 0.00 19.40 22.70 - 1
95.00 24.65 0.00 16.00 19.90 1 0
100.00 17.90 -19.50 13.50 17.20 18 35
105.00 14.43 -9.77 11.00 14.80 2 4
110.00 12.57 -8.43 10.30 13.00 21 9
115.00 14.06 -17.02 7.40 11.20 23 11
120.00 8.65 -19.41 6.10 9.60 16 69
125.00 10.50 -14.90 5.00 8.00 17 413
130.00 8.30 -12.40 3.80 7.00 1 26
135.00 7.10 -10.63 2.90 5.90 2 71
140.00 4.17 -11.57 2.10 5.20 6 35
145.00 4.00 -8.50 1.25 4.90 13 37
150.00 3.02 -7.78 0.85 2.95 1 39
155.00 6.34 0.00 0.45 4.90 - 44
160.00 3.90 0.00 0.20 4.90 - 7
165.00 4.85 0.00 0.05 4.90 - 8
170.00 2.05 0.00 - 4.90 - 7
175.00 - - - 4.70 - 0
180.00 - - - 4.50 - 0
185.00 - - - 4.40 - -
190.00 - - - 4.30 - -
195.00 - - - 4.20 - -
Apr 2016 Puts
Strike Price Change Bid Ask Volume Open Int
60.00 2.20 +1.10 1.30 4.90 30 19
65.00 - - 2.30 5.50 - 0
70.00 5.00 +2.85 3.60 5.30 25 7
75.00 4.50 0.00 4.40 7.50 2 0
80.00 6.20 +4.20 5.70 9.10 55 98
85.00 9.20 +5.75 7.60 10.70 1 6
90.00 8.30 +4.67 9.30 12.70 8 16
95.00 9.50 +4.00 11.80 14.70 5 45
100.00 14.15 +7.40 14.10 17.20 45 10
105.00 13.50 -0.50 17.10 19.90 11 11
110.00 15.70 +11.80 20.10 23.20 12 82
115.00 17.65 +12.55 23.30 26.20 41 88
120.00 24.70 +17.70 26.40 29.80 43 55
125.00 7.90 0.00 30.40 33.30 - 39
130.00 35.70 +26.28 33.90 37.40 4 14
135.00 39.70 +28.20 37.90 41.30 18 10
140.00 34.10 +20.00 42.00 45.30 1 1
145.00 - - 46.40 49.80 - 0
150.00 - - 50.70 54.30 - 0
155.00 - - 55.40 58.80 - 0
160.00 - - 60.00 63.40 - 0
165.00 59.30 0.00 64.90 68.50 - 7
170.00 - - 69.70 73.60 - 0
175.00 60.00 0.00 74.80 78.10 - 7
180.00 69.30 +8.60 79.30 83.00 10 35
185.00 - - 84.50 88.20 - -
190.00 - - 89.00 92.90 - -
195.00 - - 94.30 98.10 - -
October Puts
Strike Price Change Bid Ask Volume Open Int
100.00 5.60 +5.40 5.50 6.10 1150 2590
Price 5.60, change +5.40. Someone owning puts at 0.20 yesterday, made 2,600% today if they closed them out.
Not a bad day's work.
Neil, I completely agree, but I do find this one statement very odd…
He was the plaintiff’s supervisor, and basically left because the plaintiff was such a disaster
This is not Japan where you fall on your sword and die/resign with honor. No one does that. If I had an employee that was this bad and I only found out about it 8 months in and tried to work with the guy and THEN it still did not work out and he was fired, I would in no way feel the need to quit my job over it. (Ha, how do you like that run on sentence 5th grade English teachers!)
So other than that, the call notes sound super strong. Stock closed at $109 (after hours at 8pm)
1 Like
70.00 0.55 -0.15 0.15 0.60 239 5715
75.00 0.80 +0.70 0.65 0.85 537 2259
80.00 1.05 +0.85 0.95 1.05 569 2147
Apparently quite a few expected the stock to fall down into the 70s and 80s by Friday.
Man, what a timely move by the CEO. He clearly put the kabash on those plans. Short sellers could push the stock down further through share borrowing, but that will be a more risky proposition considering the swarms that will be coming back to repurchase their shares plus the bottom feeders looking for a bargain.
Best,
–Kevin
1 Like
If I can get those premiums I’ll be selling puts in the morning
Bob
but I do find this one statement very odd…
I was summarizing a bit. The supervisor wanted to fire the plaintiff due to his poor performance and other issues, but management didn’t let him because they were going through the OCC review by that point and they wanted continuity (and while I don’t think they said this, it wouldn’t surprise me if legal was involved at that point and told them it’d be a bad move given the allegations the plaintiff was raising). That created a lot of tension, and the supervisor ended up leaving.
So I don’t think it was falling on his sword, I think it was more that that supervising the plaintiff basically made his life miserable. But that was my interpretation. I really recommend listening to the call.
Neil
3 Likes
My impression from listening to the call was that the audit department head did not leave just because of this one individual, but that it might have been a contributing factor.
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Wrote this over on Rule Breakers’s.
http://discussion.fool.com/1069/actual-complaint-31947095.aspx
Neil, I agrre with the take, that “Ball” likely was darn frustrated in working with this “idiot”, contributing mainly to his departure.
Bob, I’ll be interested in what Puts you see most attractive.
I sold this morning Nov 15 $105 for $600, a trade that looked great when the stock moved back to $113 or more, early afternoon, then looked scary at market close, AND now post conference, gives the AFSI itch to try and cash in some more.
First post here, quite an interesting board.
Greg
I find it remarkable that someone 6 years out of college, so I’m guessing around 28 years old, could be the trigger for such a major move, something like a billion dollars in market cap wiped out in a day (hopefully temporarily!). Here’s Matt Erhart’s LinkedIn profile:
https://www.linkedin.com/pub/matt-erhart/13/821/778
He claims a 4.0 from Univ Kansas, so is probably plenty smart.
I worked at big companies in my 20s, in IT line management, doing important work, and in no way was I privy to anything that could bring down a company. I guess the difference here is it’s a financial company and he’s in the audit department. But still… he’s 28(ish)!!!
If he’s telling the truth then I feel for him, he must be feeling immense pressure today. It’s a bit tricky for me to judge the likelihood that he is being truthful vs. management. The conference call is fairly convincing though CEOs generally have to be good talkers to succeed. I could see how if management is unreasonable to work for (which Glassdoor suggests it is) that there may be some sort of payback or vendetta mindset on Matt’s part. Pure speculation. But wow.
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I find it remarkable that someone 6 years out of college, so I’m guessing around 28 years old, could be the trigger for such a major move, something like a billion dollars in market cap wiped out in a day (hopefully temporarily!). Here’s Matt Erhart’s LinkedIn profile:
https://www.linkedin.com/pub/matt-erhart/13/821/778
He claims a 4.0 from Univ Kansas, so is probably plenty smart.
I wouldn’t be surprised if no one ever hires him again.
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Ok, so I’m replying to my earlier post having now listened to the hour long call in it’s entirety. This is all my impression/opinion.
I can’t say I feel a ton better to be honest. There are a number of things that give me pause. I’m not buying more and I am actually thinking of selling what I have left.
I think there is something lurking behind the shadows here. I don’t know what, and maybe it doesn’t have anything to do with this jr auditor and what he does or doesn’t know…or…maybe it does. But something doesn’t smell right to me.
In general, there are some basic rules of how to detect if someone is lying. One of the signs, is if you get a big long drawn out answer with tons of details to a very simple question.
That may or may not have any application here. You decide.
Secondly, what’s with all the hyping of the quarter and the year and declaring that you are going to talk with legal to see if you can load up on company stock before you release earnings, but you just want to make sure you won’t get in trouble first or that someone won’t find a way to use it against you? If that last part was meant to be tongue-in-cheek I certainly didn’t get that impression on the call.
Anyways, just my two cents. Not going to be a popular view probably but it is my impression. I’m holding tight with my reduced position for now.
Good luck to everyone. I hope I am wrong. This is just all very odd and parts of the response were odd too. This might go in my too hard to figure out pile. Lots of other opportunities after the recent market turmoil.
best,
Michael
long BOFI
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There were a few things that gave me “what?” moments. The first was CEO’s sort of… stage right question about the medical leave where he “asks” whether the medical opinion/request was from a psychiatrist of doctor. Plant the seed, make a statement, question stability without actually saying it. My first thought was, “Oh, no, I hope they have talked all this over with legal.” Actually I didn’t think “no” but seems the profanity filter zapped me.
Second thing was the walking around the issue of the audit manager’s departure. He wanted to fire Mr. Erhart but couldn’t because the OCC was still there digging and BOFI needed to get this thing approved without adding distractions. The audit manager left because he was tired of the stress and the complaints about either just Mr. Erhart or his staff generally or some of both. CEO was questioned, essentially, as to why this jr. auditor was still there. Employed for 18 months. CEO says well both are gone now. What’s my problem? Well, my reading of the situation and the organization is this. Anyone with banking experience please shoot this down if I’m wrong. You have people both inside BOFI and outside loan brokers digging up loan prospects and submitting documentation. The audit department is checking the documents and probably sending info off for background checks and scanning records…, all part of a checklist. I mean this isn’t forensic accounting at this point. So the loan originators are pushing for audit approval ('cause they get commissions or performance ratings on loans that are made), and the auditors are making sure that the loans are “good”. I’d guess there is a little bit of judgment allowed, but not too much at the junior level. The loan processing is time sensitive. Offers good for ‘X’ days subject to loan approval. This is where the Audit Manager has the pressure. He has a top broker in, say, Florida with a $5 million loan pending approval and some junior auditor dillydallying with questionable questions and so Audit Manager is getting calls from Big Shot Broker (or worse, the calls go to Audit Manager’s boss) screaming to get the damn loan approved and this idiot doesn’t know this body part from an elbow.
Point is, is the audit department important or not. It is, so is it well managed and supervised? Is the company well managed. I’m reminded of Ubiquiti where they were conned out of $3 million by a Chinese supplier. Management says the accounts payable department was full of idiots but now “I’m” overseeing it. Like, if you are managing your company properly you don’t have incompetent people working there long enough to cause you this issues. This may be more prevalent in entrepreneurial-led companies. Brilliant with the business concept or technical side but don’t have the management ability and too much ego to hire it.
I would have preferred a little–no, a lot less–bombast and bluster. I would have liked walking a lot softer (but confidently) and just carrying the big stick as opposed to brandishing it (“they are going to jail”).
I’m still long. I bought twice more yesterday so I’m longer. I expect to make a profit. I believe this unloved bull market, nervous traders and machine trading is causing frequent mispricings. The money I’ve made lately has been buying the 10, 20, 30% drops. I can’t believe I’m doing this, but I guess one takes what the market gives.
KC
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