Bernstein Litowitz Berger & Grossmann LLP Announces Securities Class Action Suit Filed Against Navient Corporation, Certain Of Its Senior Executives And Directors, And Underwriters Of Its Public Securities Offerings
NEW YORK, Feb. 26, 2016 /PRNewswire/ -- Bernstein Litowitz Berger & Grossmann LLP ("BLB&G") today announced that it filed a securities class action lawsuit on behalf of its client Policemen's Annuity & Benefit Fund of Chicago ("Chicago Police") against Navient Corporation ("Navient" or the "Company") (NASDAQ: NAVI), certain of its senior executives and directors, and underwriters of the Company's public offerings of securities (collectively "Defendants"). The action, which was filed in the U.S. District Court for the District of Delaware, asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. §§ 78j(b) and 78t(a), and SEC Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5, on behalf of investors who purchased or otherwise acquired publicly traded Navient securities during the period from April 17, 2014 and February 5, 2016, inclusive (the "Class Period"). The action also asserts claims under Sections 11 and 12(a)(2) of the Securities Act of 1933 (the "Securities Act"), 15 U.S.C. §§ 77k and 77l, on behalf of: (1) purchasers of Navient securities in or traceable to the Company's public offering of $500 million in principal amount of 5.000% Senior Notes due 2020 and $500 million in principal amount of 5.875% Senior Notes due 2024 conducted on or around November 6, 2014 (the "2014 Debt Offering"); and (2) purchasers of Navient securities in or traceable to the Company's public offering of $500 million in principal amount of 5.875% Senior Notes due 2021 conducted on or around March 27, 2015 (the "2015 Debt Offering" and, together with the 2014 Debt Offering, the "Offerings").
This case was filed as a related action to Menold v. Navient Corporation, No. 1:16-cv-00075 (D. Del.) ("Menold"), the first-filed securities class action in this matter, which is presently pending before the Honorable Gregory M. Sleet. Pursuant to the notice published on February 11, 2016 in connection with the filing of the Menold action pursuant to the Private Securities Litigation Reform Act of 1995, investors wishing to serve as the lead plaintiff are required to file a motion for appointment as lead plaintiff by no later than April 11, 2016.
The Complaint alleges that during the Class Period, Defendants violated provisions of the Securities Act and/or the Exchange Act by issuing false and misleading press releases, financial statements, filings with the U.S. Securities and Exchange Commission ("SEC"), statements during investor conference calls, and offering materials. Based in Wilmington, Delaware, Navient is one of the nation's largest servicers of student loans. The Company manages nearly $300 billion in student loans for more than 12 million customers.
As alleged in the Complaint, throughout the Class Period, Navient repeatedly reassured investors of its dedication to compliance and its strong compliance culture. The Company also regularly touted the quality of Navient's student loan portfolio, and continuously reported better than expected earnings, which the Company attributed to decreasing provisions for loan losses. As a result of these misrepresentations, Navient securities traded at artificially inflated prices during the Class Period.
On February 27, 2015, the U.S. Department of Education announced that it had terminated its relationship with Navient's wholly-owned subsidiary Pioneer Credit Recovery ("Pioneer"), a collection agency, after finding that Pioneer misled an "unacceptably high" number of borrowers, resulting in larger fees for Pioneer to the detriment of those borrowers. The loss of this contract, caused the price of Navient shares to decline by $1.89 per share, or 8.8%. Then, on July 13, 2015, the Company announced a substantial cut to its prior financial guidance for 2015, to reflect higher default trends for its private education loan portfolio. As a result of this disclosure, shares of Navient declined $1.94 per share, or 10.6%.
On August 24, 2015, Navient disclosed that its subsidiary, Navient Solutions, Inc. ("NSI"), received a formal notification that the Consumer Financial Protection Bureau ("CFPB") intends to initiate an enforcement action based on continued violations of consumer protection laws. As a result of these disclosures, the price of Navient stock fell $1.02, or 7.8%. Then, on January 7, 2016, Generation Progress issued a report recommending that state governments tighten oversight of the student loan servicing industry by, among other things, enacting new laws to protect student loan borrowers and to specifically task state officials with helping borrowers resolve complaints against student loan companies. These disclosures caused the price of Navient shares to fall $0.66 per share, or 6%, from $10.93 to $10.27. Finally, on February 6, 2016, U.S. presidential candidate Hillary Clinton stated that Navient's "behavior is outrageous" and that the Company has been "misleading people" and "doing some really terrible things." As a result of this disclosure, the price of Navient shares fell $0.57, or 5.99%.
Chicago Police is represented by BLB&G, a firm of over 100 attorneys with offices in New York, California, Louisiana, and Illinois. If you wish to discuss this Action or have any questions concerning this notice or your rights or interests, please contact Avi Josefson of BLB&G at 212-554-1493, or via e-mail at [email protected].
Since its founding in 1983, BLB&G has built an international reputation for excellence and integrity. Specializing in securities fraud, corporate governance, shareholders' rights, employment discrimination, and civil rights litigation, among other practice areas, BLB&G prosecutes class and private actions on behalf of institutional and individual clients worldwide. Unique among its peers, BLB&G has obtained several of the largest and most significant securities recoveries in history, recovering billions of dollars on behalf of defrauded investors. More information about BLB&G can be found online at www.blbglaw.com.
SOURCE Bernstein Litowitz Berger & Grossman LLP
Share this article