Lieff Cabraser serves as Lead Counsel for a proposed class of shareholders in BofI Holding, Inc. (“BofI”) in a securities fraud lawsuit against BofI and certain of BofI’s senior executives and directors. BofI is a San Diego, California-based holding company of BofI Federal Bank, a federal savings bank that provides online banking services and products under brands such as “Bank of Internet” and “NetBank.”
The class action, in which the Houston Municipal Employees Pension System has been appointed Lead Plaintiff, alleges that throughout the Class Period of September 4, 2013 through February 3, 2016, defendants touted BofI’s purportedly conservative loan-underwriting standards and compliance with legal and regulatory obligations while, in fact, secretly manipulating BofI’s financials, engineering lucrative related-party transactions between BofI and senior officials, and flouting banking and consumer protection laws and other laws. The action alleges additional wrongdoing at BofI, including maintaining undisclosed lending partnerships pursuant to which BofI originated high-risk loans and reaped millions of dollars in origination fees and the ability to report growth in loan originations and improved efficiency without accounting for the attendant risks.
When investors learned that Defendants were allowing BofI to engage in far riskier practices than Defendants represented, the price of BofI common stock, which traded as high as $142.54 per share during the Class Period, fell significantly, to $63.98 per share (pre-split adjusted) by the end of the Class Period, thereby causing Lead Plaintiff and other Class Members to suffer damages.
On October 13, 2015, The New York Times reported that a former internal auditor at BofI filed an action against BofI alleging widespread misconduct at the Company, including by BofI’s Chief Executive Officer, defendant Gregory Garrabrants, who allegedly abused his powerful position at the Company for personal gain. Numerous other former BofI employees have also provided accounts of serious wrongdoing at BofI.
The case is Houston Municipal Employees Pension System v. BofI Holding, Inc., et al., No. 3:15-cv-02324 (S.D. Cal.). A copy of the consolidated amended complaint is available here.
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