⁍ Last week, a three-judge panel of the 9th U.S. Circuit Court of Appeals issued a significant decision in a shareholder class action against BofI.

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⁍ Judge Mark Bennett, who was nominated to the 9th Circuit by President Donald Trump and assumed office in July 2018, dissented from that part of the 9th Circuit opinion.

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⁍ Bennett said uncorroborated whistleblower allegations, which might prove to be ‘nothing more than wisps of innuendo and speculation,’ should not be regarded as a corrective disclosure.

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– Last week, a federal appeals court ruled in favor of a bank holding company accused of defrauding shareholders, Reuters reports. According to the Wall Street Journal, BofI Bancorp was accused of misstatements that led to a drop in its share price. The suit was brought by BofI shareholders, who alleged that the bank’s CEO and other execs knew about the misstatements but didn’t report them. The lawsuit claimed that BofI’s share price dropped as a result. Last week, a three-judge panel of the 9th US Circuit Court of Appeals ruled in favor of BofI shareholders, who alleged that the bank’s CEO and other execs knew about the misstatements but didn’t report them. The ruling allowed the shareholder class action to proceed. Judge Mark Bennett dissented from the majority’s decision, arguing that uncorroborated whistleblower allegations shouldn’t be considered a “corrective disclosure.” He argued that the market doesn’t consider the claims plausible because insider accounts are often full of truth. Bennett also argued that shareholder class actions are used as an “in terrorem device to bludgeon companies into settling claims.” According to Fortune, Bennett is only the second recently-appointed appellate judge to raise concerns about shareholder class actions. In June, a three-judge panel of the 3rd Circuit ruled in favor of former shareholders of M&T Bank who accused the bank of failing to disclose regulatory risks related to its anti-money-laundering practices.