Sallie Mae Securities Class Action Lawsuit
Girard Gibbs serves as lead counsel representing investors of SLM Corporation ("Sallie Mae") in litigation alleging that Sallie Mae, the leading provider of student loans in the United States, misled the public about its financial performance in order to inflate the company’s stock price.
Specifically, the lawsuit alleges that between 2007 and 2008, Sallie Mae violated federal securities laws by concealing from the public that it had:
- Lowered the standards it used to qualify borrowers in order to increase its portfolio of lucrative private loans,
- Hid borrower defaults from the public by changing its loan forbearance policy, and
- Maintained inadequate reserves to compensate for potential loan losses in order to inflate profits.
The lawsuit alleges that the investors ultimately suffered investment losses when Sallie Mae’s stock price fell after the company’s true financial condition was revealed.