SoFi Slams Muddy Waters Report As 'Misleading,' Weighs Legal Action

SoFi Technologies, Inc. (NASDAQ:SOFI) on Tuesday forcefully rejected claims made in a report by short-selling firm Muddy Waters Research, calling the analysis "misleading" and signaling it may pursue legal action. • SoFi Technologies stock is trading in a tight range. Where is SOFI stock headed? A central claim of the Muddy Waters report is that SoFi's actual personal loan charge-off rate is approximately 6.1%, more than double the 2.89% it reports to the market. Muddy Waters asserts that SoFi manipulates this rate by disposing of loans just before they reach the charge-off threshold and by "parking" defaulted loans in unconsolidated entities. In a statement issued through Businesswire, SoFi said the report reflects a "fundamental lack of understanding" of its financial statements and business model. The digital financial services company added that it believes the claims are "factually inaccurate" and designed to deceive investors, while also highlighting that Muddy Waters disclosed plans to potentially profit from short positions tied to the report's publication. The clash underscores the ongoing tension between publicly traded companies and activist short sellers, whose research has at times exposed corporate misconduct but has also drawn criticism for potentially influencing market sentiment to their advantage. SoFi emphasized that it operates under strict regulatory oversight and adheres to established accounting standards. The company noted that its financial disclosures are prepared in accordance with U.S. GAAP and comply with rules set by the U.S. Securities and Exchange Commission. The company also pointed to its status as a bank holding company supervised by the Federal Reserve, and as the owner of a nationally chartered bank regulated by the Office of the Comptroller of the Currency. Reaffirming confidence in its internal controls and reporting practices, SoFi said it stands by the integrity of its financial statements and will take appropriate steps to address what it views as a misleading portrayal of its business.