According to a press release dated December 19, 2007, the complaint charges Huntington and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Huntington operates as the holding company for The Huntington National Bank (“Huntington National”), which provides retail and commercial financial products and services.
Specifically, the complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. Huntington had acquired more than $1.5 billion in exposure to subprime mortgages with its July 2007 acquisition of Sky Financial Group, Inc. (“Sky Financial”). As the real estate and credit markets continued to soften, defendants repeatedly assured Huntington investors that the Company had undertaken significant preparations and implemented defensive measures to weather the deteriorating real estate and credit markets. By the time Huntington closed the merger with Sky Financial, the housing and credit crisis had deepened, yet defendants continued to conceal Huntington’s growing exposure to these problems so as to not acknowledge the acquisition was a debacle so soon after it closed. As a result of defendants’ false statements, Huntington stock traded at an artificially inflated price of approximately $18 per share during much of the Class Period.
Then, on November 16, 2007, Huntington announced its fourth quarter 2007 financial results, stating that as a result of the recently announced actions of Franklin Credit Management Corporation, which had a commercial lending relationship with Sky Financial, and related deterioration in Franklin’s mortgage portfolios, 2007 fourth quarter results for Huntington were expected to include an after-tax charge of up to $300 million, or $0.81 per common share. As a result of this charge, Huntington would report a 2007 fourth quarter net loss.
On this news, Huntington’s stock dropped from $16.08 per share to as low as $14.38 per share, closing at $14.75 per share on November 16, 2007 on volume of over 10 million shares.
According to the complaint, the true facts, which were known by defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company had far greater exposure to anticipated losses and defaults in its home loan portfolio, particularly with subprime debt exposure arising from Sky Financial, than it had previously disclosed; and (b) defendants’ Class Period statements about the Company’s financial results were materially false due to its failure to record timely and adequate accruals for losses on its exposure to delinquent subprime mortgages.
On June 24, 2009, an order consolidating the cases, appointing lead plaintiff and lead counsel was filed with the court in this ongoing action.
On August 22, 2009, a consolidated class action against all defendants, filed by all plaintiffs was entered into this docket.
On December 4, 2009, it was ordered and adjudged that pursuant to the Opinion and Order, Defendants’ motion to dismiss was GRANTED; dismissing all of Plaintiffs’ claims with prejudice. A subsequent judgment was entered in the docket on the same day.