Advanta Corporation (NASDAQ: ADVNA, NASDAQ: ADVNB) Investor Securities Class Action Lawsuit 10/14/2009

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Company Name(s): 
Advanta
Case Name: 
Advanta Shareholder Class Action Lawsuit 10/14/2009
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: ADVNA
NASDAQ: ADVNB
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
10/14/2009
Class Period Begin: 
10/16/2006
Class Period End: 
01/30/2008
Court of Filing: 
United States District Court for the Eastern District of Pennsylvania
Deadline To File for Lead: 
12/14/2009
Date Settled: 
08/04/2014
Settlement Amount: 
$13,250,000
Deadline to Participate in Settlement: 
08/18/2014
Summary: 

August 4, 2014 - The court approved the settlement.

April 22, 2014 - The court preliminarily approved the settlement.

March 14, 2014 - Parties filed a stipulation of settlement.

September 30, 2011 - The court granted in part and denied in part the defendants' motions to dismiss and granted lead plaintiff leave to file an amended complaint.

October 18, 2010 - The defendants filed motions to dismiss.

August 3, 2010 - The lead plaintiff filed an amended complaint on behalf of investors who purchased Advanta Corporation class A and/or Class B common stock (NASDAQ: ADVNA, NASDAQ: ADVNB) between October 16, 2006 and January 30, 2008. The lead plaintiff alleges that the defendants violated the Securities xchange Act of 1934 by issuing false and misleading statements between October 16, 2006 and January 30, 2008.

June 4, 2010 - Lead plaintiff and lead counsel were appointed.

December 14, 2009 - Lead plaintiff motions were filed.

October 14, 2009 - An investor in Class A and/or Class B common stock of Advanta Corporation (NASDAQ: ADVNA, NASDAQ: ADVNB later trading on the OTC sheets as ADVBQ, ADVNQ) filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania against Advanta Corporation over alleged violations of Federal Securities Laws.

According to the complaint, the plaintiff alleges that Advanta Corporation and certain of its officers and directors violated the Securities Exchange Act of 1934 by issuing between October 31, 2006 and November 27, 2007 materially false and misleading statements regarding the its business and financial results. Specifically, the complaint alleges that defendants engaged in improper behavior that harmed Advanta Corporation's investors by failing to disclose the impact of the economic environment and the deteriorating credit trends on its business and that the company failed to adequately and timely record losses for its impaired loans and customer delinquencies, causing its financial results to be materially false. Defendants also concealed the adverse effects the company’s manipulations of its cash rewards program was having on its business. As a result of defendants’ false statements, Advanta Corporation's stock traded at artificially inflated prices during October 31, 2006 and November 27, 2007, reaching a high of $34.07 per share on June 19, 2007, so the lawsuit.

Then, on November 27, 2007, Advanta Corporation held a conference call with analysts and investors to discuss the company’s business performance. Advanta Corporation announced that due to the volatility of the economy, guidance for 2008 would not be released. Additionally, since the release of the third quarter 2007 results on October 25, 2007, a higher percentage of customers had become delinquent on their credit card payments and a lower percentage of customers made payments, indicating a trend of charge-offs. After these disclosures, Advanta Corporation stock dropped, closing on November 27, 2007 at $11.06 per share, and falling to as low as $9.35 per share on November 28, 2007, a decline of 72% from Advanta Corporation between October 31, 2006 and November 27, 2007 - high of $34.07 per share in June 2007.

Advanta Corporation of Spring House, PA, issues business purpose credit cards to small businesses and business professionals in the United States. The company's business credit card accounts provide approved customers with unsecured revolving business credit lines. Advanta Corporation reported in 2007 Total Revenue of $562.14 million with a net income of $71.03 million and in 2008 Total Revenue of $488.75 million. Shares of Advanta Corporation recently traded at $0.504 per share, down from its 52 week high of $6.23 per share, $9.52 per share on September 09, $9.87 per share in May 09, $10.40 per share in February 09, and over $33 per share in 2007.