SLM Corporation (a/k/a Sallie Mae) - Securities Class Action

Company and Case Information

IMPORTANT INFORMATION | INDEX OF FILINGS | SEARCH

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright (c) 2001
Stanford Law School

SLM Corporation (a/k/a Sallie Mae) Summary: The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results and, despite evidence that Sallie Mae’s loan loss provisions for its subprime borrowers attending non-traditional schools were inadequate both prior to and at the start of the Class Period, defendants failed to adequately reserve for losses in Sallie Mae’s non-traditional portfolio. As a result of defendants’ false statements, Sallie Mae’s stock traded at artificially inflated prices during the Class Period, reaching a Class Period high of $57.98 per share in July 2007.

On January 3, 2008, the Company disclosed in an SEC filing that it would be cutting back on its core business of lending to students by being “more selective” in making students loans due to turmoil in the credit markets and a new federal law that slashed subsidies to the private companies that make government-backed student loans. On this news, Salle Mae’s stock dropped $2.49 per share to close at $16.67 per share, a one-day decline of 15%.

According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company failed to engage in proper due diligence in originating student loans to subprime borrowers, particularly those attending non-traditional institutions; (b) the Company was not adequately reserving for uncollectible loans in its non-traditional portfolio in violation of generally accepted accounting principles, causing its financial results to be materially misstated; (c) the Company had far greater exposure to anticipated losses and defaults related to its non-traditional loan portfolio than it had previously disclosed; and (d) given the deterioration and the increased volatility in the subprime market and reductions in federal subsidies, the Company would be forced to tighten its lending standards on both its federal loans and private education loans which would have a direct material negative impact on its loan originations going forward.

On March 31, 2008, several motions were filed by different groups and individuals to be appointed as lead plaintiffs, lead counsels as well as to consolidate cases. A response to the above mentioned motion was filed on April 17, 2008 by SLM Venture. Just as quickly, a memorandum of law in opposition of consolidating cases, to appoint lead plaintiffs and counsels was filed by Sheet Metal Workers Pension Fund Trust at the same time.

On July 23, 2008, a memorandum and order was entered. The order stated that the actions are consolidated. In addition, the Westchester Capital is appointed as lead plaintiff and Abbey Spanier is approved as lead counsel. On July 29, 2008, a scheduling order No. 2 was entered in regards to the pretrial conference. However, a stipulation and pretrial order No. 2 amending pretrial order No. 1 was entered on September 16, 2008. Lastly, a scheduling order No. 3 was entered on September 30, 2008.

On January 9, 2009, a Consolidated Amended Class Action Complaint was filed with the court.

On September 03, 2009, a Second Amended Class Action Complaint was filed by the plaintiffs in the action.

On September 24, 2010, a Memorandum & Order was issued by the Court regarding Defendants SLM Corporation's and Albert Lord's motion to dismiss the Second Amended Class Action Complaint were denied. Defendant Charles Andrews' motion to dismiss the Complaint was granted.

INDUSTRY CLASSIFICATION:
SIC Code: 6141
Sector: Financial
Industry: Consumer Financial Services

COMPANY/ISSUER NAME:	SLM Corporation
COMPANY/ISSUER TICKER:	SLM
COMPANY WEBSITE:	http://www.salliemae.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Robert H. Burch, et al. v. SLM Corporation, et al.

COURT: S.D. New York	DOCKET NUMBER: 08-CV-01029
JUDGE NAME: Hon. William H. Pauley, III
DATE FILED: 01/31/2008	SOURCE: Notice of Filing
CLASS PERIOD START: 01/18/2007	CLASS PERIOD END: 01/03/2008
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Coughlin Stoia Geller Rudman & Robbins LLP (Melville) 58 South Service Road, Suite 200, Melville, NY, 11747 (voice) 631.367.7100, (fax) 631.367.1173, info@csgrr.com/ Coughlin Stoia Geller Rudman & Robbins LLP (San Diego) 655 West Broadway, Suite 1900, San Diego, CA, 92101 (voice) 619.231.1058, (fax) 619.231.7423, info@csgrr.com/ Law Offices of Alfred G. Yates 519 Alleghany Bldg., 429 Forbes Avenue, Pittsburgh, PA, 15219 (voice) 412.391.5164, (fax) , _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violation of the Federal Securities Laws - Demand for Jury Trial
Type: Complaint		Date on the document: 01/31/2008
Memorandum and Order
Type: Order Appointing LP/LC		Date on the document: 07/23/2008
US District Court Civil Docket
Type: Docket		Date on the document: 9/30/2008

REFERENCE COMPLAINT

In re: SLM Corporation

COURT: S.D. New York	DOCKET NUMBER: 08-CV-01029
JUDGE NAME:
DATE FILED: 01/09/2009	SOURCE: Docket
CLASS PERIOD START: 01/18/2007	CLASS PERIOD END: 01/23/2008
TYPE OF COMPLAINT: First Amended and Consolidated
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Abbey Spanier Rodd & Abrams, LLP (New York) 212 East 39th Street, New York, NY, 10016 (voice) 212-889-3700, (fax) 212-684-519, info@abbeyspanier.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Amended Class Action Complaint
Type: Complaint		Date on the document: 01/09/2009
Second Amended Class Action Complaint
Type: Complaint		Date on the document: 09/03/2009
U.S. District Court Civil Docket
Type: Docket		Date on the document: 09/03/2009
Memorandum & Order
Type: Order		Date on the document: 09/24/2010
U.S. District Court Civil Docket
Type: Other		Date on the document: 08/11/2011

OTHER DOCUMENTS
Class Action Complaint for Violation of Federal Securities Laws - Demand for Jury Trial
Case Name and/or Number: Russell Patrick, et al. v. SLM Corporation, et al.
Type: Complaint		Date on the document: 03/11/2008

WARNING AND DISCLAIMER OF LIABILITY:
The information included on this Web site, whether provided by personnel employed by Stanford Law School or by third parties, is provided for research and teaching purposes only. Neither Stanford University, Stanford Law School, nor any of their employees, agents, contractors, or affiliates warrant the accuracy or completeness of the information or analyses displayed herein, and we caution all readers that inclusion of any information on this site does not constitute an endorsement of the truthfulness or accuracy of that information. In particular, this Web site contains complaints and other documents filed in federal and state courts, which make allegations that may or may not be accurate. No reader should, on the basis of information contained in or referenced by this Web site, assume that any of these allegations are truthful.

Go to Search page | Go to Case Index page | Back to Top

�