On November 2, 2018, Plaintiff's law firm issued a press release announcing the lawsuit. According to the press release, Synchrony Financial is a consumer financial services company. The Complaint alleges that during the Class Period, Synchrony falsely represented that its consistent and disciplined underwriting practices had led to a higher quality loan portfolio than those of its competitors. In truth, Synchrony relaxed its underwriting standards and increasingly offered private-label credit cards to riskier borrowers to sustain growth. The truth about Synchrony's credit standards began to be revealed on April 28, 2017, when the Company announced disappointing first quarter 2017 earnings driven by poor loan performance. This news caused Synchrony's shares to decline by $5.25 per share, or nearly 16%.
Following this disclosure, the Company represented that it had tightened credit standards, but falsely characterized those underwriting changes as modest. In fact, the Company had made significant modifications to its underwriting policies, but concealed that these modifications were damaging its relationships with its retail partners, including Walmart.
On July 26, 2018, multiple news outlets reported that Walmart had chosen a competitor to replace Synchrony. Together, these two disclosures caused Synchrony's shares to decline nearly 14%. Then, on November 1, 2018, Walmart sued Synchrony accusing the Company of improper underwriting in connection with the Walmart/Synchrony credit card program. As a result of this disclosure, Synchrony shares declined by over 10%.
On February 5, 2019, the Court issued an Order appointing Lead Plaintiff and Counsel. On March 25, the Court issued an Order consolidating cases. All future docketing was ordered to be done in the lead case 18-CV-01818. Lead Plaintiff filed an amended Complaint on April 5. Defendants filed a Motion to Dismiss the amended Complaint on June 26. On March 31, 2020, the Court issued an Order granting Defendants' Motion to Dismiss. The case was dismissed with prejudice.
Lead Plaintiffs filed a notice appealing the Dismissal Order on April 20, 2020. On February 16, 2021, the Court of Appeals affirmed in part and reversed in part the ruling of the District Court. The case was remanded to the District Court for further proceedings.
On May 17, 2021, Defendants filed a Motion to Dismiss the remaining claim. The Court issued an Order denying Defendants' Motion to Dismiss on February 11, 2022.
Lead Plaintiffs filed a Motion for Class Certification on June 24, 2022. On February 3, 2023, the Court issued an Order granting the Motion for Class Certification.
The parties entered into a Stipulation and Agreement of Settlement on April 3, 2023. On April 12, the Court granted preliminary approval of the Settlement. On August 4, the Court granted final approval of the Settlement, including an award of Attorneys’ Fees and Expenses. The Clerk of Court entered Final Judgment on August 7.
On June 25, 2024, the Court issued an Order approving the Settlement's distribution plan.
