Ally Financial Inc (NYSE:ALLY) Investor Securities Class Action Lawsuit 10/21/2016

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Company Name(s): 
Ally Financial
Case Name: 
Ally Financial Shareholder Class Action 10/21/2016
Affected Securities
NYSE: ALLY
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
10/21/2016
Summary: 

October 21, 2016 (Shareholders Foundation) - An investor in Ally Financial Inc (NYSE:ALLY)shares filed lawsuit in Michigan on behalf of certain investors in Ally Financial Inc (NYSE:ALLY) over alleged Securities Laws violations by Ally Financial Inc in connection the company’s April 11, 2014 initial public offering.

The plaintiff alleges on behalf of the investors, who purchased Ally Financial Inc (NYSE:ALLY) common shares pursuant or traceable to its initial public offering ("IPO") on April 11, 2014, that the defendants violated the Securities Act of 1933.

On October 31, 2014, Ally Financial Inc disclosed that it received a document request from the U.S. Securities and Exchange Commission (“SEC”) in connection with its investigation related to subprime automotive finance and related securitization activities. In December 2014, Ally Financial Inc 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”.

The plaintiff claims that that certain Ally Financial Inc officials failed to disclose the severity of rising subprime auto loan delinquency rates, the deficient underwriting measures employed in the origination of its subprime auto loans, and the aggressive tactics used with low-income borrowers in order to raise approximately $2.375 billion in the company's April 2014 IPO.
Shares of Ally Financial Inc (NYSE:ALLY) declined from $25.21 per share in May 2014, respectively $24.95 per share in early September 2014, to as low as $15.73 per share in early 2016.