According to the law firm press release, AmEx, together with its subsidiaries, provides charge and credit payment card products and travel-related services to consumers and businesses worldwide. In addition to issuing its own proprietary cards, AmEx has entered into a series of co-branding relationships with travel providers and retailers.
The complaint alleges that during the Class Period, defendants issued false and misleading statements and/or failed to disclose material adverse information regarding AmEx’s business and prospects, including the status of its negotiations with U.S. Costco to renew its co-branding agreement, which was set to expire on March 31, 2016, and the financial impact of that agreement on AmEx’s business. As a result of these false and misleading statements and/or omissions during the Class Period, AmEx stock traded at artificially inflated prices, reaching a high of nearly $95 per share on December 29, 2014.
Then on February 12, 2015, AmEx announced that it had lost the U.S. Costco co-branding relationship and that the financial impact of that loss would be severe. AmEx disclosed that the U.S. Costco co-branding agreement generated 8% of the Company’s revenues in 2014, that one in ten U.S. AmEx cards had been issued pursuant to the U.S. Costco co-branding arrangement and that 20% of its outstanding loans had been made pursuant to that agreement. Finally, as a result of the loss of the U.S. Costco co-branding agreement, AmEx stated that the Company’s 2015 and 2016 profits would suffer and that the Company would not be able to make any headway on its previous efforts to increase earnings per share until 2017 at the very earliest. In response to this announcement, the price of AmEx common stock fell from a close of $85.40 per share on February 11, 2015, to close at $77.53 per share on February 13, 2015, a decline of nearly $8 per share.
Plaintiffs filed an amended complaint on January 19, 2016.
On September 26, 2017, the Court issued an Order granting Defendants' motion to dismiss, with leave to amend. On November 17, Plaintiff filed a Notice of Intent Not to Amend the Complaint. The Court issued an Order closing the case on November 22. Plaintiff filed a Notice appealing the decision on December 28. On May 29, 2019, the Court of Appeals affirmed the District Court's decision.