Robbins Arroyo LLP: Ally Financial Inc. (ALLY) Misled Shareholders According to a Recently Filed Class Action
December 06 2016 - 1:48PM
Business Wire
Shareholder rights law firm Robbins Arroyo LLP announces that a
class action complaint was filed against Ally Financial Inc. (NYSE:
ALLY) in the State of Michigan Circuit Court for the County of
Wayne. The complaint is brought on behalf of all purchasers of Ally
securities pursuant to the company's April 11, 2014 Initial Public
Offering ("IPO") for alleged violations of the Securities Act of
1933 by Ally's officers and directors. Ally, a diversified
financial services company, provides a range of financial products
and services primarily to automotive dealers and their retail
customers in the United States.
View this information on the law firm's Shareholder Rights
Blog:www.robbinsarroyo.com/shareholders-rights-blog/ally-financial-inc
Ally Accused of Failing to Reveal Negative Impact of Subprime
Auto Loans
According to the complaint, on April 11, 2014, Ally conducted
the IPO, selling 95 million common shares at a price of $25 per
share. In December 2014, Ally revealed that it had received a
subpoena from the U.S. Department of Justice as part of an
investigation "related to subprime automotive finance and related
securitization activities" in addition to an inquiry by the U.S.
Securities and Exchange Commission ("SEC"). Ally officials
allegedly omitted facts that were required to be stated in the
registration statement and incorporated offering materials that the
company filed with the SEC in support of the IPO. Specifically, the
complaint alleges that Ally officials failed to disclose: (1) the
severity of rising subprime auto loan delinquency rates; (2)
deficient underwriting measures employed in the origination of its
subprime auto loans; and (3) aggressive tactics used with
low-income borrowers in order to raise approximately $2.375 billion
in the company's April 2014 IPO.
In June 2016, news began circulating in the media that car loans
were seen as an increased risk for auto lenders due to higher
default rates from increased subprime lending. On June 3, 2016,
Automotive News published an article stating that Ally was "dialing
back on lending to consumers at the lower end of the subprime
credit score spectrum." Since news of Ally's struggles hit the
market, Ally's stock declined over 22% to close at $16.08 per share
on June 14, 2016. On July 28, 2016, The Wall Street Journal
reported that four of the largest auto lenders by loan volume,
including Ally, had stated on second quarter earnings calls that
used car prices are at risk of falling.
Ally Shareholders Have Legal Options
Concerned shareholders who would like more information about
their rights and potential remedies can contact attorney Darnell R.
Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the
shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in
shareholder rights law. The firm represents individual and
institutional investors in shareholder derivative and securities
class action lawsuits, and has helped its clients realize more than
$1 billion of value for themselves and the companies in which they
have invested.
Attorney Advertising. Past results do not guarantee a similar
outcome.
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version on businesswire.com: http://www.businesswire.com/news/home/20161206006242/en/
Robbins Arroyo LLPDarnell R. Donahue(619) 525-3990 or Toll Free
(800) 350-6003DDonahue@robbinsarroyo.comwww.robbinsarroyo.com
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