SAN DIEGO & STAMFORD, Conn.--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that a purchaser of Synchrony Financial (NYSE: SYF) filed a shareholder derivative complaint against the company's officers and directors for alleged breaches of fiduciary duties, unjust enrichment, and waste of assets. Synchrony is a consumer financial services company in the United States.
View this information on the law firm's Shareholder Rights Blog: https://www.robbinsarroyo.com/synchrony-financial-mar-19/
Synchrony Accused of Misrepresenting Its Underwriting Practices
According to the complaint, defendants breached their fiduciary duties by recklessly making false and misleading statements regarding Synchrony's underwriting practices and their impact on relationships with Synchrony's retail partners.
Synchrony claimed that it enforced disciplined underwriting practices to achieve a higher quality loan portfolio than those of its competitors, when in actuality Synchrony's underwriting standards were relaxed and extended private-label credit cards to riskier borrowers in order to sustain growth. This resulted in Synchrony's loan portfolio having greater credit risk than what was presented to the investing public, with a significantly higher likelihood of defaults, reserves, and charge-offs. When Synchrony tightened its credit practices, it lost its partnership with its highest revenue-producing account, Walmart, which had generated more than $10 billion in annual loan receivables and accounted for 19% of Synchrony's overall retail card balances. Walmart ultimately sued Synchrony for exposing the Walmart/Synchrony credit card program to significant unique credit risk and seeks damages "in an amount … estimated to be no less than $800 million." In addition to the Walmart action, Synchrony faces liability from federal securities fraud class actions.
Synchrony Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Leonid Kandinov at (800) 350-6003, LKandinov@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. Sign up for our FREE portfolio monitoring service, Stock Watch.
Attorney Advertising. Past results do not guarantee a similar outcome.