Grabar Law Office is investigating potential claims against the officers and directors of Synchrony Financial ("Synchrony") on behalf of current long-term stockholders.
On February 11, 2022, the United States District Court of the District of Connecticut denied the Synchrony defendants’ motion to dismiss a class action complaint alleging securities fraud related to false or misleading statements defendants made regarding “pushback” from retail partners.
A class action complaint has been filed against Synchrony. Among other things, the action alleges that Synchrony falsely represented that its consistent and disciplined underwriting practices had led to a higher quality loan portfolio than those of its competitors. In reality, 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 started to be revealed on April 28, 2017, when Synchrony 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%. Synchrony later represented that it tightened credit standards, but falsely characterized those underwriting changes as modest. Instead, Synchrony made significant modifications to its underwriting policies, but concealed that those modifications were damaging its relationships with its retail partners, including Walmart. On July 26, 2018, several news outlets reported that Walmart had chosen a competitor to replace Synchrony. Together, the two disclosures caused Synchrony's shares to decline nearly 14%. Then, on November 1, 2018, Walmart sued Synchrony, accusing Synchrony of improper underwriting in connection with the Walmart-Synchrony credit card program. As a result of this disclosure, Synchrony's shares declined by over 10%.
If you have held Synchrony Financial shares since at least October 21, 2016, you can seek corporate reforms, the return of funds back to company coffers, and potentially a court approved incentive award if appropriate.
If you would like to learn more about this matter at no cost to you, contact us atjgrabar@grabarlaw.com or call 267-507-6085.
