BofI Ruling May Erode Cos.' Securities Class Action Defenses

Law360 (October 28, 2020, 5:48 PM EDT) -- On Oct. 8, the U.S. Court of Appeals for the Ninth Circuit reversed the dismissal of a securities fraud class action against San Diego-based BofI Holding Inc., now known as Axos Bank, in In re: BofI Holding Inc. Securities Litigation.

A majority of the appellate panel held that a former employee's fraud allegations in a whistleblower lawsuit may qualify as a corrective disclosure and may be used in the securities class action to plead loss causation under the Private Securities Litigation Reform Act, as long as the whistleblower allegations are plausible, and even if there are no additional disclosures or evidence...

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