This article assumes the reader has knowledge of the Aurelius Presentation and Information. The information set forth in this article does not constitute a recommendation to buy or sell any security. This article represents the opinion of the author as of the date of this article. Please read the Disclaimer at the bottom of the page in its entirety before continuing.

In 2010, COR Capital (“COR”) led the recapitalization of a Los Angeles based regional bank named First Pactrust (“FPB”) which later changed its name to Banc of California. Banc of California (BANC) has grown its assets at the highest rate since 2010 of any of the largest 105 U.S. Banks since 2010, with assets going from under $1BN to over $10.1BN as of June 30th, 2016. Banc of California grew Loans by over $1BN in the 6 month period ending June 30th, 2016 alone. Despite this loan growth, Loan Loss Reserves to total loans was just 0.72% in the previous period, which is extremely low for a relatively new lender expanding its asset base this quickly.

Volmanac was very impressed by the Aurelius Presentation on BANC, which suggests that the BANC has multiple unreported related parties ties, ‘independent directors’ with close relationships to management, and potential ties to Jason Galinis who has been convicted of securities fraud. Galinis has been tied to numerous stock frauds over the past few years (Gerova, Tribal Bond Allegation).

Volmanac believes BANC is un-investable, however BANC is currently trading below book value and has a very high return on tangible common equity (16.6% as of 4Q2015), so there is potential risk being short the common equity from a valuation perspective if these relationships are simply arms-length/coincidences. Volmanac believes BANC is un-investable but believes the best way to express this view is to sell the 5.25% ‘25 trading at 103, which are down only 1 point since the Aurelius story was released vs. a basket of US regional bank 10-year bonds. This yield differential is roughly 100-150 bps. Additionally, buying a basket of US bank non-cumulative preferreds vs selling the BANC non-cumulative 7% series-E preferreds, which are trading above par ($25.05) at a approximate yield differential of 100bps, is a great risk-reward trade given the recent information. This trade allows for a much larger position which could yield a very large asymmetric gain if BANC is even investigated by the SEC or the FDIC ($8bn customer deposits are potentially at risk).

Since the Aurelius report was released, BANC’s response to the story has been very interesting:

  • BANC demanded that Seeking Alpha remove the story
  • The company announced that David L. Aronoff from Winston & Strawn LLP (who is CEO Steve Sugarman’s PERSONAL attorney) has been leading an ‘independent’ investigation into “potential impropriety” related to Galanis for the better part of a year.
  • Jason Sugarman and Steve Sugarman have deleted their LinkedIn Accounts, and the website (along with many other websites) has been deleted.

The Aurelius Information provides very compelling evidence to establish a relationship between BANC, COR, Valor, Camden, and Galinis. Volmanac has discovered a small amount of additional information which confirms these relationships. Knowledge of the Aurelius Presentation and Information is required:

Aurelius alleges Sugarman and BANC executive Jeffery Seabold used Camden to engage in transactions with Galanis-controlled entities during the Gerova fraud. According to Aurelius, Galinis diverted a $18.3mm note on the Pali-House Hotel to Camden (in which BANC CEO Steve Sugarman has a financial interest). Camden then transferred this interest to NORe Capital. The now defunct penny stock Inspired Builders (ISRB) then gave $19mm in ISRB shares and other interests to NORe capital in exchange for the note. NORe Capital, as the Aurelius Report notes, shares addresses with Valor as well as Galanis-controlled NavProv Holdings and Allius Ltd.

Interestingly, the website, was registered by NORe Capital:


Additional domains registered by NORe Capital include (Gary Hirst was the President and Chairman of the Board of Gerova Financial Group):


At the time of the transfer, the CEO of Inspired Builders was Matthew Nordgren. According to his biography, Nordgren Worked for CS financial, which was acquired by BANC of California in 2014, as well as Camden Partners (Camden originally transferred the $18.3mm note to NORe).

“Nordgren was named the CEO of Inspired Builders (IRSB), a publicly traded REIT that specializes in residential and small commercial asset classes. Nordgren also serves as a Consultant for CS Financial, a California based independent residential and commercial mortgage brokerage firm, as well as Camden Capital Partners in a managing director role. Additionally, he is an Executive at St. Augustine Holdings Focused on capital sourcing, business development, and managing the overall state of the business that has upwards of 15 companies in its portfolio. He is currently CEO/Founder of NORDCO Consulting LLC and a Partner and Executive with NORDCO, Inc., a Dallas based energy conservation firm. Among other things, Nordgren is a Board Member for Insurance Company of the Americas, Caplain UK Focus Growth Real Estate Fund, and the International Tower Group.

Additionally, Nordgren states he is an Executive at St. Augustine Holdings. According to WHOIS, the St. Augustine Website was registered by Jason Sugarman (BANC CEO Steve Sugarman’s brother), with a Camden Capital email:


Additionally, the address of St. Augustine Holdings is the same as the address for Camden Capital (9595 Wilshire Blvd. Suite 810 and Suite 801, respectively). St. Augustine Holdings also showed up as a member of the COR group of companies on the now deleted COR Group Worldwide website. Finally, Nordgren states that he is a board member of “International Tower Group”, which shows up in the Panama Papers. One shareholder is COR Tower Group, Inc. which also appears to be part of the COR group of companies.

According to Jason Sugarman’s now deleted bio on the Valor Company website (his SEC bio is still available), he states that he is the founder of “International Tower Group” as a well as a founding shareholder of Banc of California (we assume through the COR investment):


Furthermore, according to the Valor company factsheet, Valor is owned By COR:


This is confirmed by the now deleted COR Group World Wide ( website, which once listed the COR group of companies:


The Websites for COR Capital ( and COR Group World Wide ( have been deleted. Why do these websites continue to be taken offline if these potential related party relationships are not improper?

There are many red flags which we believe make BANC currently un-investable:

  • Ownership through a recapitalization
  • Changing an Entity Name
  • Rapid Asset growth through acquisitions
  • “Independent Directors” with close ties to management
  • Complex management compensation structures and consulting agreements
  • Suspicious/unreported third-party transactions
  • Filing defamation suits (ironically filed by David L. Aronoff who is supposedly leading the ‘independent investigation’) and threatening short-sellers
  • Deleting websites and public profiles
  • Business relationships with individuals convicted of securities fraud

There appears to be a clear connection between Galinis, Camden, COR, Valor, and therefore BANC. There is too much evidence uncovered in the hundreds of pages in the Aurelius Presentation and Information for these relationships to be mere coincidence. Additionally, we believe Galinis was clearly involved in COR Capital and therefore BANC, as evidenced by this email alone. We believe the best risk-adjusted way to hedge against a prolonged investigation into BANC is to sell the 5.25% ‘25 trading at 103 vs. a basket of US regional bank 10-year bonds. This yield differential is roughly 100-150 bps. Additionally, we believe buying a basket of US bank non-cumulative preferreds vs selling the BANC non-cumulative 7% series-E preferreds, which are trading above par ($25.05) at a approximate yield differential of 100bps, is a great risk-reward trade.

We expect the above trade will perform well on a risk adjusted basis as additional information is uncovered. Matt Nordgren said it best on his website:

” ‘You can’t connect the dots looking forward; you can only connect them looking backwards.’ -Steve Jobs” - Matt Nordgren

Update: 11/27/2016

BANC still has not filed their latest 10-Q and requested an extension:

Additionally, we have been working with a few readers to pull loan level data for BANC. We believe Mark Cohen originates the majority of BANC’s commercial loans through Cohen Financial Group, which is owned by CS financial and therefore BANC. Additionally, we used the follow two public data sources to pull loan level data:

You can view a snapshot of this loan level information here.

Many of these loans are to LLCs, and therefore we are attempting to use CLEAR investigative software and state corporation filings to pull ownership information for these entities and check if there are any additional loans to related parties.