Axos Financial shares slide to 52-week low after report on atypical loans (NYSE:AX)
Axos Financial (NYSE:AXIS) the stock fell to a new 52-week low after BNC News reported that the online bank has a history of making atypical loans and that last month it was sued by a former employee who alleged that the company intentionally understaffed its compliance department. The Axos share is down 0.7% in the early afternoon of Thursday, and slipped as low as $40.90 earlier in the session.
A spokesperson for Axos (AX) told NBC that the bank disputes Jennifer Brear Brinker’s allegations “and her perception of the underlying factual circumstances.”
Later this month, the company is expected to face a former internal auditor in a wrongful termination case in federal court in California, NBC said. Charles Matthew Erhart alleged that Axos (AX) failed to notify regulators of subprime loans made to questionable borrowers and failed to disclose to regulators that it had received grand jury and other subpoenas , among other allegations. The bank’s spokesperson told NBC that all allegations have been investigated. “None of the investigations or audits found any basis for Erhart’s allegations,” he said.
According to the report, the bank specialized in lending to foreign nationals and offered cash recovery loans, which allow borrowers who paid cash for a property to immediately withdraw money from the investment.
One of the company’s recent loans, made in mid-February, refinanced a $100 million mortgage on Trump Tower due in September, NBC said, citing a New York City Department of Finance document. York. The loan was granted days after the auditor resigned from the Trump Organization, according to the report.
Last October, B. Riley downgraded Axos (AX) to Neutral from Buy, citing the stock’s premium valuation and limited upside potential to estimates.