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Case Status:    SETTLED
On or around 04/16/2014 (Ongoing date of last review)

Filing Date: October 14, 2009

According to a press release dated October 14, 2009, the complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. Specifically, the complaint alleges that defendants engaged in improper behavior that harmed Advanta’s investors by failing to disclose the impact of the economic environment and the deteriorating credit trends on its business and that the Company failed to adequately and timely record losses for its impaired loans and customer delinquencies, causing its financial results to be materially false. Defendants also concealed the adverse effects the Company’s manipulations of its cash rewards program was having on its business. As a result of defendants’ false statements, Advanta’s stock traded at artificially inflated prices during the Class Period, reaching a high of $34.07 per share on June 19, 2007.

Then, on November 27, 2007, Advanta held a conference call with analysts and investors to discuss the Company’s business performance. Advanta announced that due to the volatility of the economy, guidance for 2008 would not be released. Additionally, since the release of the third quarter 2007 results on October 25, 2007, a higher percentage of customers had become delinquent on their credit card payments and a lower percentage of customers made payments, indicating a trend of charge-offs. After these disclosures, Advanta stock dropped, closing on November 27, 2007 at $11.06 per share, and falling to as low as $9.35 per share on November 28, 2007, a decline of 72% from Advanta’s Class Period high of $34.07 per share in June 2007.

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) Advanta’s assets contained tens of millions of dollars worth of impaired credit card receivables for which the Company had not accrued losses; (b) prior to and during the Class Period, Advanta had been extremely aggressive in granting credit to customers without verifying the customers’ ability to pay, to such a degree that by the summer of 2009, Advanta customers’ default rate would be almost six times worse than industry average; (c) Advanta’s manipulation of its cash rewards program angered customers and caused the Company to lose good, creditworthy customers; (d) Advanta’s credit receivables were unduly risky due to the Company’s practice of issuing credit cards to small business owners without, in many instances, verifying income; (e) defendants failed to properly account for Advanta’s continuing delinquent customers and the credit trends in the Company’s portfolio, resulting ultimately in large charges to reflect impairments; and (f) the Company was not on track to be profitable in 2008.

On November 9, 2009, Advanta Corporation filed a Suggestion of Bankruptcy. On June 4, 2010, the Honorable Cynthia M. Rufe signed the Order appointing Western Pennsylvani Electrical Employees Pension Fund as lead plaintiff and approved Coughlin Stoia Geller Rudman & Robbins LLP as lead counsel. On August 3, 2010, the lead plaintiff filed an Amended Complaint. The Amended Complaint expanded the class period, the named defendants, and added violation of §20A of the Securities Exchange Act of 1934. On October 18, 2010, the defendants filed five separate motions to dismiss the Amended Complaint.

On September 30, 2011, the Honorable Cynthia M. Rufe granted and denied certain pending motions to dismiss. The plaintiffs have been granted leave to file an amended complaint.

On March 13, 2014, the parties entered into a Stipulation of Settlement.

COMPANY INFORMATION:

Sector: Financial
Industry: Consumer Financial Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: ADVNB
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: E.D. Pennsylvania
DOCKET #: 09-CV-04730
JUDGE: Hon. Cynthia M. Rufe
DATE FILED: 10/14/2009
CLASS PERIOD START: 10/31/2006
CLASS PERIOD END: 11/27/2007
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    655 West Broadway, Suite 1900, Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    619.231.1058 619.231.7423 · info@csgrr.com/
  2. Law Offices of Bernard M. Gross (Philadelphia)
    John Wanamaker Building; 100 Penn Square East, Suite 450, Law Offices of Bernard M. Gross (Philadelphia), PA 19107
    215.561.3600 215.561.3600 · susang@bernardmgross.com
No Document Title Filing Date
COURT: E.D. Pennsylvania
DOCKET #: 09-CV-04730
JUDGE: Hon. Cynthia M. Rufe
DATE FILED: 08/03/2010
CLASS PERIOD START: 10/16/2006
CLASS PERIOD END: 01/30/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    655 West Broadway, Suite 1900, Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    619.231.1058 619.231.7423 · info@csgrr.com/
No Document Title Filing Date