Why Eagle Bancorp Stock Plunged on Friday

Shares of Eagle Bancorp, Inc. (NASDAQ: EGBN) are down by more than 24% as of 4 p.m. EST after a short seller accused company insiders of treating Eagle "as their own private piggy bank." Aurelius Value wrote that insiders have operated the bank to enrich themselves, often by carving out undisclosed special deals where bank management benefits personally from a customer relationship.

Related-party transactions between publicly traded companies and their managers are often a troubling sign, but they're especially problematic when they aren't disclosed. It's even worse when these related-party transactions involve government-insured bank deposits.

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Source: Fool.com