Scott+Scott Attorneys at Law LLP Investigating Synchrony’s Directors and Officers for Breach of Fiduciary Duties - SYF
NEW YORK--(BUSINESS WIRE)--Jan 3, 2019--Scott+Scott Attorneys at Law LLP (“Scott+Scott”), a national securities and consumer rights litigation firm, is investigating whether certain directors and officers of Synchrony Financial (“Synchrony” or the “Company”) (NYSE: SYF) breached their fiduciary duties to the Company and its shareholders. If you are a Synchrony shareholder, you are encouraged to contact Scott+Scott for additional information.
Scott+Scott is investigating whether members of the Synchrony Board made false and/or misleading statements and/or failed to disclose that: (1) Synchrony had not maintained consistent, disciplined underwriting practices and had not been focusing on a higher quality asset base; (2) Synchrony’s loan portfolio was not of a “stable asset quality,” but rather, to sustain loan receivable growth, Synchrony had loosened its underwriting guidelines and began approving and extending credit to riskier and less creditworthy borrowers; (3) Synchrony had made other significant modifications to its underwriting practices, including changing its new account acquisition strategies, tightening up credit line increases, and decreasing existing credit lines; (4) the Company knew that its key retail partners, including Walmart, were dissatisfied with the Company’s underwriting changes and that this had damaged its relationships with key retail partners; and (5) as a result, Synchrony’s public statements were materially false and misleading at all relevant times.
On April 28, 2017, Synchrony announced disappointing first quarter 2017 earnings driven by poor loan performance and disclosed that Synchrony would be setting aside over $1.3 billion in reserves to cover probable loan losses, a 21% increase in reserves over the prior quarter. Following this news, Synchrony’s stock price fell $5.25 per share, or 15.89%, to close at $27.80 per share on April 28, 2017.
On July 12, 2018, it was reported that Walmart was considering ending its relationship with Synchrony. On this news, Synchrony’s stock price fell $1.84 per share, or 5.29%, to close at $32.96 per share on July 12, 2018. Two weeks later, on July 26, 2018, multiple news outlets confirmed that Walmart had opted to replace Synchrony with one of Synchrony’s competitors. Following this announcement, Synchrony’s stock price fell $3.44 per share, or 10.29%, to close at $30.00 per share on July 26, 2018.
Then, on November 1, 2018, Walmart sued Synchrony, alleging that Synchrony had deliberately underwritten the Walmart/Synchrony credit card program in a way that exposed the program to significant unique credit risk. Walmart’s lawsuit seeks damages “in an amount . . . estimated to be no less than $800 million.” Following this news, Synchrony’s stock price fell $3.01 per share, or 10.22%, to close at $26.43 per share on November 2, 2018.
What You Can Do
If you are a Synchrony shareholder, you may have legal claims against the Company’s directors and officers. If you wish to discuss this investigation, or have questions about this notice or your legal rights, please contact attorney Joe Pettigrew toll-free at (844) 818-6982 or at firstname.lastname@example.org.
About Scott+Scott Attorneys at Law LLP
Scott+Scott has significant experience in prosecuting major securities, antitrust, and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals, and other entities worldwide with offices in New York, London, Connecticut, California, and Ohio.
View source version on businesswire.com:https://www.businesswire.com/news/home/20190103005664/en/
CONTACT: Joe Pettigrew
Scott+Scott Attorneys at Law LLP
KEYWORD: UNITED STATES NORTH AMERICA NEW YORK
INDUSTRY KEYWORD: PROFESSIONAL SERVICES LEGAL
SOURCE: Scott+Scott Attorneys at Law LLP
Copyright Business Wire 2019.
PUB: 01/03/2019 02:40 PM/DISC: 01/03/2019 02:40 PM