BOFI loses bid to silence whistleblower

I sold out my BOFI position on this news, took my 30% gain and am on the sidelines for now. I still feel long term they’re going prevail in these suits and be a significantly bigger winner, but I think I’m going to get an opportunity to get back in lower at this time.…

Breaking my long held silence on BOFI, this company will not interest me until such time that Garrabrants leaves voluntarily or he’s put in prison. Despite the veracity of sundry allegations, I’m convinced that this guy is lying sack o’ s**t. While that, in and of itself, has not stopped several people from succeeding in the business world, I would rather not invest in a company with someone like that at the helm.

Unless there is more to the article than what comes up when you click on the link, I don’t see why this would cause anyone to sell their shares.
For example: what was the basis of the ruling; what impact, if any, does the ruling have on the litigation, etc.

Unless I"m missing something here, I’m just not seeing how this forms a basis for selling shares of BOFI.


I’m just not seeing how this forms a basis for selling shares of BOFI.

I don’t want to speak for the original poster. When the stock rallied on the news of no SEC investigation, and possibility of this lawsuit being dismissed, there is a reason it could go down right?

I am really not convinced the short thesis on this stock is SEC investigation or lawsuit by the ex-employee. That’s what we have seen in seeking alpha articles but those who hold such a big short position may or may not share the opinions expressed in those articles.

“When the stock rallied on the news of no SEC investigation, and possibility of this lawsuit being dismissed, there is a reason it could go down right?”

I’m not following you: the article is not saying anything about the lawsuit being dismissed; rather, it is referring to a preliminary injunction that BOFI was trying to obtain. As far as I can tell, this does not affect BOFI’s ability to proceed with its lawsuit against the alleged whistleblower. My further understanding is that the judge who made the ruling clarified that this does not mean there was no wrong- doing on the part of the alleged whistleblower.


I do not believe this is not the case that BOFI is attempting to have dismissed. This is the case that BOFI filed.

It will be interesting to see how this all shakes out, but it is not surprising that the temporary injunction was denied and I do not think that hurts BOFI legally. Temporary injunctions can be tough and I think that BOFI already got all it wanted out of this case in that it had a temporary retraining order, it was able to get the documents from the former employee, and it was even able to get documents from the attorney.

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I’m just not seeing how this forms a basis for selling shares of BOFI.

I guess I wouldn’t call my selling a “basis”, more a “hunch”, since this was a strike against BOFI that wasn’t caused by shorts. I’ve held through all the short attacks, but I think this news in conjunction with I’m sure some upcoming short articles that will follow will give me an opportunity to get back in lower than today’s price.

I could be completely wrong, I am a lot, but it’s a part of my investing I’ve been changing over the past year that has worked out for me more times than not.

When the CMG food safety scares came up, I sold out of half my position around $600, to be buying it back now around $400. Pretty happy about that, as I think things there will be improving from here.

In the past I’ve always held to the Fool mantra of rarely, if ever, sell, and overall it has worked well for me. I’ve held many stocks I own for over 10 years. What prompted this new style was holding too many Fool stocks to HUGE gains, only to ride them all the way back down or further (SCSS, DDD, and LL to name a few). If I had the mindset I currently do, I would not have rode them all back down to lows, but would have sold early on in the bad news cycle, and then waited and bought back in (if I still liked the company’s prospects) when things seemed to be improving.

It’s not market timing, it’s selling when events make it probable (in my mind, at least) that drops could be coming.

I admit, this was a small strike against BOFI, but it’s never taken much to move this stock down in the past, and I have to admit, because of that, I’ve always been a little shaky holding this one as IF any of the claims against them do pan out, the stock will drop hard and fast.

That being said, I was happy to book some gains today, and if a better buying opportunity presents itself, I’ll probably get back in again.


I agree with AZ5speedy.

from comments on that original link: "This is not news. It’s part of an order released August 5, 2016. Shameful that it would appear to breaking news, especially the headline. Here is the link to the courts order." bold highlight added by me.

Doesn’t surprise me that the shorts keep on issuing deceiving posts. Glad the after market hours seem to be UP slightly at the moment! Probably just another spook tactic to make some jump ship. I understand why some have an itchy trigger though.

I’m waiting till the real news comes out.

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Apparently the link I just copied is a different Motion or Order. Hard to keep all the aspects of these legal proceedings straight.

I’m still waiting for the outcome of the main court case against BOFI which I thought someone posted was supposed be in about 2 weeks from now. Can anyone share the source of that court date?

Probably will be a rollercoaster until then. I hope I enjoy the ride by the time it is over.

Yes, this ruling had to do with a request for an injunction to prevent Erhart from sharing confidential information. As someone above noted, injunctions are difficult to obtain. I do not see this as a strike against BOFI whatsoever.

(I’ve tried to pull up a copy of the ruling on, but I’m having trouble with my account).

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It’s not market timing, it’s selling when events make it probable

Ignore the labels, you should be comfortable with your investment. If you think after 30% run I don’t want to deal with news cycle, nothing wrong with that. In fact it is prudent. There is no glory in riding back, no bank including BOFI accepts Pride deposits.

Unfortunately I don’t know how to sell after hours in IB. So i am waiting for market open. :slight_smile:

the article is not saying anything about the lawsuit being dismissed

The perceived reason behind the stock rally was the lawsuit by former employee will be dismissed. That is what I was alluding to.

In any case, I am not totally convinced the massive short on this stock is hinging just on the lawsuit by former employee.

Wow, BOFI is quite the polarizing stock! :slight_smile:

Wow, BOFI is quite the polarizing stock! :slight_smile:

That is quite an understatement. There are folks who believe you are an evil person if you have any negative opinion of the company or management. I guess thee are lot of folks with lot of money riding on this one. :slight_smile:

Wow, BOFI is quite the polarizing stock! :slight_smile:
Oh no it’s not.


written as a comment to the SA Article.

Verbatim from the ruling published today:
“The Supreme Court has emphasized that preliminary injunctions are ‘an extraordinary remedy never awarded as of right.’” Garcia v. Google, Inc., 786 F.3d 733, 740" …

"To obtain a preliminary injunction, BofI “must satisfy Winter’s four-factor test…
(1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm in the absence of preliminary relief, (3) the balance of equities tips in its favor, and (4) an injunction is in the public interest."

The judge struck down the motion on factor 3, which is a high bar to prove. The basis was that Erhart had no additional damaging information to share. That is the newsworthy piece here.

For the shorts, this would have been news had she struck down on factor 4 thereby implying Erhart was a Whistleblower with a public policy defense to his actions.

I don’t know how the poster knows it was struck down for factor 3.


You can make money trading on the high volatility, or holding on the assumption that it will go up a lot eventually, but you take the chance of bad news days, and the possibility that there really is something rotten in Denmark.

Check out SYF. I bought them today. Not growing as fast as BOFI, but atleast it is a better place to work, pays a dividend, PE less than 11%, deposits still growing, and glassdoor says, CEO approval rating 91%…

Also read this (if you want to be impressed)…

And you guys think that BOFI has shady policies:

Wells Fargo to pay $185M over shady account openings

Federal regulators say employees at Wells Fargo (NYSE:WFC) created millions of fake bank accounts and credit card numbers over the past five years in an illegal bid to boost their sales figures. The bank has been fined $185M for the practices, including a record $100M by the Consumer Financial Protection Bureau. Wells Fargo has also fired at least 5,300 employees who were involved in the scam, sources told the NYT.

That’s banking, guys.



I wonder how many C level executives were let go with the WFC scam?