Shuman, Glenn & Stecker investigate Synchrony Financial
DENVER – (COMMERCIAL THREAD) –Shuman, Glenn and Stecker announces that it is investigating potential claims against certain officers and directors of Synchrony Financial (“Synchrony” or the “Company”) (NYSE: SYF). Synchrony is a consumer financial services company.
The firm’s investigation focuses on allegations raised in a securities class action lawsuit against Synchrony and some of its senior executives in the U.S. District Court for the District of Connecticut. The lawsuit alleges that Synchrony misrepresented that its consistent and disciplined underwriting practices resulted in a better loan portfolio than its competitors. In truth, Synchrony has relaxed its underwriting standards and increasingly offered private label credit cards to riskier borrowers to support growth. The truth began to come out on April 28, 2017, when Synchrony reported disappointing first quarter 2017 results due to poor loan performance. On this news, Synchrony’s shares were down $ 5.25 per share, or nearly 16%.
Following the disclosure, the company said it tightened credit standards, but falsely characterized the underwriting changes as modest. In fact, Synchrony made significant changes to its underwriting policies, but concealed that these changes affected its relationships with its retail partners, including Walmart Inc. (“Walmart”). On July 26, 2018, media reported that Walmart had chosen a competitor to replace Synchrony. On this news, Synchrony’s shares were down almost 14%. Then, on November 1, 2018, Walmart sued Synchrony, charging Synchrony with bad underwriting under the Walmart / Synchrony credit card program. Synchrony stock fell by more than 10% as a result of this development.
On March 31, 2020, the District of Connecticut dismissed the securities class action lawsuit. On February 16, 2021, however, the United States Court of Appeals for the Second Circuit overturned (in part) the dismissal and remitted the securities class action lawsuit to the District of Connecticut, paving the way for the prosecution of the case to trial.
If you currently own Synchrony common stock and would like to discuss your rights, or if you have any information relating to this investigation, please contact Kip Shuman toll free (866) 569-4531 or email Mr. Shuman at [email protected]
Shuman, Glenn & Stecker represents investors across the country, focusing his practice in shareholder litigation.