Discover Financial Services
Lead Plaintiff Deadline 10/31/2023
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of Illinois on behalf of those who acquired Discover Financial Services (“Discover” or the “Company”) (NYSE: DFS) securities during the period from February 21, 2019 through August 14, 2023, inclusive (the “Class Period”). Investors have until October 31, 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
On July 20, 2022, Discover disclosed an internal investigation into its student loan servicing practices. On this news, the price of Discover shares declined by $9.80 per share, or approximately 8.9%, from $109.80 per share to close at $100 on July 21, 2022.
On July 19, 2023, Discover disclosed that it had misclassified certain credit card products over an approximate 15-year period as a result of an acknowledged compliance failure and had received a proposed consent order from the FDIC in connection with an unrelated regulatory matter. On this news, the price of Discover shares declined by $19.40 per share, or approximately 15.9%, from $121.85 per share to close at $102.45 on July 20, 2023.
On August 14, 2023, Discover announced that Roger C. Hochschild had agreed to resign from his role as Discover’s Chief Executive Officer, President, and a Director of the Company, effective immediately. That same day, Discover disclosed in a filing with the U.S. Securities and Exchange Commission that the Company’s credit card delinquency rate increased to 3.00% for the 24-month period ended July 31, 2023, as compared to 2.86% for the 24-month period ended June 31, 2023. On this news, Discover shares declined by $9.69, or approximately 9.4%, to close at $92.96 per share on August 15, 2023.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose that: (i) Discover maintained deficient risk management and compliance procedures; (ii) as a result of the foregoing deficiencies, the Company had, inter alia, failed to comply with applicable student loan servicing standards, misclassified certain credit card accounts, overcharged customers, and failed to stem its ballooning credit card delinquency rate; and (iii) the foregoing issues, when they became known, would subject Discover to significant financial exposure, regulatory scrutiny, and reputational harm.
On July 20, 2022, Discover disclosed an internal investigation into its student loan servicing practices. On this news, the price of Discover shares declined by $9.80 per share, or approximately 8.9%, from $109.80 per share to close at $100 on July 21, 2022.
On July 19, 2023, Discover disclosed that it had misclassified certain credit card products over an approximate 15-year period as a result of an acknowledged compliance failure and had received a proposed consent order from the FDIC in connection with an unrelated regulatory matter. On this news, the price of Discover shares declined by $19.40 per share, or approximately 15.9%, from $121.85 per share to close at $102.45 on July 20, 2023.
On August 14, 2023, Discover announced that Roger C. Hochschild had agreed to resign from his role as Discover’s Chief Executive Officer, President, and a Director of the Company, effective immediately. That same day, Discover disclosed in a filing with the U.S. Securities and Exchange Commission that the Company’s credit card delinquency rate increased to 3.00% for the 24-month period ended July 31, 2023, as compared to 2.86% for the 24-month period ended June 31, 2023. On this news, Discover shares declined by $9.69, or approximately 9.4%, to close at $92.96 per share on August 15, 2023.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose that: (i) Discover maintained deficient risk management and compliance procedures; (ii) as a result of the foregoing deficiencies, the Company had, inter alia, failed to comply with applicable student loan servicing standards, misclassified certain credit card accounts, overcharged customers, and failed to stem its ballooning credit card delinquency rate; and (iii) the foregoing issues, when they became known, would subject Discover to significant financial exposure, regulatory scrutiny, and reputational harm.