Sometimes the best defense is a good offense, as the old adage goes.

That’s the approach SoFi Technologies is taking in the face of a scathing short report, and it appears to be paying off. Shares of the financial technology company rose 2.6% to $17.82 on Wednesday as the tech-heavy Nasdaq Composite slipped 0.3% lower.

The move came just hours after the company faced allegations of understating debt and intentionally deceiving shareholders from short-seller firm Muddy Waters.

The short-selling firm, which was founded by investor Carson Block in 2010, has a track record of taking aim at predominantly Chinese companies. On Tuesday, it turned its attention to SoFi, shares of which has seen explosive growth this year on the back of a string of strong quarterly earnings reports.

In a 28-page document reviewed by Barron’s, the firm styled SoFi as a “financial engineering treadmill” rather than a growing business and alleged it served to enrich its executives while diluting shareholders.

SoFi, in turn, released a statement threatening legal action against the firm.

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

Muddy Waters “stand to profit from their own misleading report,” SoFi added. Short sellers benefit if a stock they’re betting against plunges regardless of whether or not their report ends up being proven true.

Rather than respond directly to the company, Muddy Waters took to X, where it posted a meme goading SoFi to “run that game.”

The back-and-forth on its own may not have been big enough news to influence the stock price. However, CEO Anthony Noto made his second stock purchase this year on the heels of the report, which was received by investors as a bullish signal.

Noto, who has a reputation for buying the dip in the stock price, appears to be putting his money where his company’s mouth is. A filing with the Securities and Exchange Commission shows Noto bought 28,900 shares for roughly $17.32 each on Tuesday. The position was valued at just over $500,000 as of the end of the session.

Noto has seldom bought stock in recent years. A transaction at the start of March marked his first open-market purchase since 2024. Between the two transactions, the CEO has bought roughly $1.5 million worth of company stock this year.

Muddy Waters has accused the company of accounting manipulation partly to benefit its chief executive, claiming that “without these manipulations, CEO Noto would lose most—if not all—of his performance bonus.” SoFi has not addressed this claim directly.

Separately on Tuesday, four executives signaled to the SEC their intent to sell company stock. Filings indicated the sales included amounts to cover tax obligations following the vesting of equity awards.

SoFi asserted in a statement that it was a ”highly regulated public company” that maintains strong confidence in the integrity of its financial reporting.

When approached for comment on SoFi’s response, Muddy Waters didn’t mince words. “Muddy Waters has been sued a number of times,” the firm told Barron’s. “We’re undefeated.”