What happened

Shares of Banc of California (NYSE:BANC) are up about 17% as of 12 p.m. EST Thursday. The company announced it concluded its internal investigation and found "no violation of law and that Jason Galanis had no indirect or direct control or undue influence over the Company."

So what

In October 2016, a short report asked tough questions about Banc of California's then-CEO Steven Sugarman and his possible ties to Galanis, a serial fraudster.

The facade of a stone bank building.

Image source: Getty Images.

The company quickly launched an internal investigation, but it turned out to be a ruse. The "independent" investigation was anything but independent, and the bank overstated the degree to which management had discussed the issue with regulators, among other problems.

Sugarman stepped down as CEO and Chairman of the Board in January, and the bank then disclosed that it was cooperating with the Securities and Exchange Commission regarding a former order to deliver certain documents to regulators.

Now what

The market is apparently willing to assume Banc of California is in the clear, pushing shares up by more than 17% in active trading Thursday morning. Given high short interest as a percentage of the float, it doesn't take much to send shares flying higher.