LOS ANGELES–(BUSINESS WIRE)–$STOCKS—The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Discover Financial Services (“Discover” or the “Company”) (NYSE: DFS) common stock between February 21, 2019 and August 14, 2023, inclusive (the “Class Period”). Discover investors have until October 31, 2023 to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to participate.
On July 20, 2022, Discover released its second quarter 2022 financial results, disclosing that it was “suspending until further notice its existing share repurchase program because of an internal investigation relating to its student loan reservicing practices and related compliance matters.” On this news, Discover’s stock price fell $9.80, or 8.9%, to close at $100.00 per share on July 21, 2022, thereby injuring investors.
Then, on July 19, 2023, Discover disclosed that it incorrectly classified certain credit card accounts into its highest merchant and merchant acquirer pricing tier since mid-2007. Additionally, the Company disclosed receipt of a proposed consent order from the Federal Deposit Insurance Corporation in connection with an unrelated regulatory matter. On this news, Discover’s stock price fell $19.40, or 15.9%, to close at $102.45 per share on July 20, 2023.
Then, on August 14, 2023, Discover announced that its CEO had resigned. That same day, the Company also disclosed that its credit card delinquency rate had increased to 3.00% for the 24-month period ended July 31, 2023, as compared to 2.86% for the 24-month period ended June 31, 2023 – a higher level than the pre-pandemic rate of 2.37% in July 2019. On this news, Discover’s stock price fell $9.69, or 9.4%, to close at $92.96 per share on August 15, 2023, thereby injuring investors further.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) DFS maintained deficient risk management and compliance procedures; (2) as a result of the foregoing deficiencies, the Company had, inter alia, failed to comply with applicable student loan servicing standards, misclassified certain credit card accounts, overcharged customers, and failed to stem its ballooning credit card delinquency rate; (3) the foregoing issues, when they became known, would subject DFS to significant financial exposure, regulatory scrutiny, and reputational harm; and (4) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
Follow us for updates on Twitter: twitter.com/FRC_LAW.
If you purchased Discover common stock during the Class Period, you may move the Court no later than October 31, 2023 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Discover common stock, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 2121 Avenue of the Stars, Suite 800, Los Angeles, California 90067 at 310-914-5007, by email to info@frankcruzlaw.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contacts
The Law Offices of Frank R. Cruz, Los Angeles
Frank R. Cruz, 310-914-5007
info@frankcruzlaw.com
www.frankcruzlaw.com