Short-Seller Carson Block Says SoFi Profits Are ‘Fake,’ Likens Firm to Enron: Report

• Muddy Waters stated in its short report in March 2026 that SoFi is a “financial engineering treadmill” rather than a healthily growing loan origination business.
• The firm also added that SoFi appears to have at least $312 million worth of material misstatement in the form of unrecorded debt.
• Muddy Waters stated that SoFi’s Loan Platform Business is a disguised form of borrowing, with the company booking loan proceeds as fee income.

Short-seller Carson Block on Monday reportedly compared SoFi Technologies Inc. (SOFI) to bankrupt Enron, alleging that the company’s profits for a given period are fake.

According to a Business Insider report, Block followed up on his firm Muddy Waters Research’s bearish bet on SoFi with a new letter, stating that it operates in a “gray zone.”

“We chose SOFI as a campaign subject because its financial reporting genuinely bothers us. In all seriousness, substantially all its profits in a given period are, for lack of a better word, fake,” Block stated in the letter.

Shares of SoFi Technologies were up more than 3% in Monday morning’s trade. Retail sentiment on Stocktwits around the company trended in the ‘bearish’ territory at the time of writing.

SoFi Is A ‘Financial Engineering Treadmill’, Says Muddy Waters

Muddy Waters stated in its short report in March 2026 that SoFi is a “financial engineering treadmill” rather than a healthily growing loan origination business.

“SOFI shareholders are incessantly diluted so management can hit bonus targets through GE Capital-style loan marks and Enron-esque off-balance-sheet structures that disguise borrowings as revenue,” the firm stated in its report.

Muddy Waters also added that SoFi appears to have at least $312 million worth of material misstatement in the form of unrecorded debt. It stated that if its estimate is correct, there could be other extensive misstatements that the firm has not detected yet.

The firm stated that SoFi’s Loan Platform Business is a disguised form of borrowing, with the company booking loan proceeds as fee income.

“The arrangement is structurally analogous to the VIE structures Enron used to keep debt off its balance sheet,” Muddy Waters stated.

Enron used special-purpose entities to move debt and underperforming assets off its balance sheet, making the company appear more profitable and less risky than it actually was.

SoFi Says Short Report Designed To Deceive Investors

Responding to Muddy Waters’ initial disclosure last month that it is short SoFi, the financial technology company in March 2026 said that the report is designed to deceive investors.

“The claims made in the Muddy Waters report demonstrate a fundamental lack of understanding of our financial statements and business. We intend to explore potential legal action against Muddy Waters for the factually inaccurate and misleading report,” SoFi stated.

SOFI stock is down 36% year-to-date, but up 57% over the past 12 months. The Global X FinTech ETF (FINX) is down 11% over the past 12 months, while the VanEck Social Sentiment ETF (BUZZ) is up 42%.

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