BofI Holdings Falls Following Short Seller's Comments

BofI Holding BOFI shares tumbled as much as four percent Tuesday after an activist short seller suggested a "huge regulatory risk" to the company's "stored value" bank card business.

BOFI, which stands for Bank of Internet, offers the usual array of small bank services and as of last year had a loan portfolio valued at about $2.5 billion, plus about $400,000 in various securities.

Citron Research, run by notable short-seller Andrew Left issued a report Tuesday that said the company's stored value business is "vulnerable to regulatory action" noting that two issuers were issued cease and desist orders in recent years.

BOFI acquired H&R Block Bank in April for an undisclosed price, and Citron said this "dramatically increases their exposure" to the bank cards.

Short interest accounted for 1.15 million of BOFI's 14.2 million shares outstanding.

BofI was trading recently at $73.42, down 0.86 percent.