On June 15, 2004, the Court entered the Order by U.S. District Judge William H. Yohn Jr. approving distribution of the net settlement fund. Earlier, on March 27, 2002, the Court entered the Revised Stipulation of Settlement. The next day, the Court entered the Preliminary Approval Order by Judge William H. Yohn Jr., certifying the class action. Further, on June 18, 2002, the Court entered the Final Judgment and Order of Dismissal and the case was closed. According to Providian Financial Corporation’s Form 10-Q for the quarterly period ended June 30, 2002, the Company recorded a settlement amount of $38 million which was funded by the Company's insurance carriers.
On or around February 22, 2000, the case was transferred to the U.S. District Court for the Eastern District of Pennsylvania.
The original Complaint charges that defendants violated the U.S. securities laws by issuing materially false and misleading statements and by omitting material facts required to be disclosed so as to make the statements issued not materially false and misleading throughout the Class Period. Specifically, the complaint alleges that Providian improperly obtained revenues, and misrepresented the source of its revenues and income in public filings and press releases. Defendants are charged with improperly conducting its credit card business by, among other things, intentionally failing to post credit card payments on time in order to enable the Company to improperly record as revenues late fees and penalties, improperly enrolling new credit card customers without their permission, and improperly charging credit card customers for Providian's fee-based products not requested. Once the facts concerning defendants' conduct became known and it was disclosed that Providian was the subject of an investigation by the San Francisco district attorney's office, the price per share of Providian's stock fell from a Class Period high of $131.63 to close at $78.43 on June 4, 1999, a fall of over 40%.