CIT Group Inc. Case 07/16/2009
March 23, 2012 - Proposed $75 million settlement with former CIT shareholders in a class-action securities fraud lawsuit. According to the Notice:
Securities and Time Period: CIT common stock (CUSIP No. 125581108) purchased or acquired between December 12, 2006 and March 5, 2008, and CIT-Z securities purchased or acquired pursuant or traceable to the October 17, 2007 registration statement and prospectus (CUSIP No. 125581405).
Settlement Fund: $75,000,000 in cash. Your recovery will depend on the number of shares of CIT common stock purchased or acquired between December 12, 2006 and March 5, 2008, and/or CIT-Z securities purchased or acquired, and the timing of your purchases and any sales. If claims are submitted for 100% of the eligible shares of CIT common stock, the estimated average recovery per share of common stock will be approximately $0.308 before deduction of Court-approved fees and expenses. If claims are submitted for 100% of the eligible shares of CIT-Z securities, the estimated average recovery per share will be approximately $0.303 before deduction of Court-approved fees and expenses. The actual amount per share you could receive will depend on a number of factors, which are explained in the Plan of Allocation contained below.
Settlement Class: The Court has conditionally certified a Settlement Class of all purchasers or acquirers of CIT common stock from December 12, 2006 through and including March 5, 2008, and all purchasers of CIT-Z securities pursuant or traceable to the October 17, 2007 registration statement and prospectus, and who were allegedly damaged thereby. Excluded from the Settlement Class are Defendants; members of each Defendant’s immediate family; any entity in which any Defendant has or had a controlling interest; directors of CIT; and Defendants’ legal representatives, heirs, successors, or assigns of any such excluded party. Also excluded from the Settlement Class are those Persons who timely and validly request exclusion from the Settlement Class pursuant to this Notice.
Reasons for Settlement: The Settlement avoids the costs and risks associated with continued litigation, including the danger of no recovery, and provides a benefit to the Settlement Class now.
What Is This Lawsuit About?
This case was brought as a class action alleging that Defendants made false and misleading statements about CIT’s business and financial results between December 12, 2006 and March 5, 2008. Lead Plaintiff alleges that Defendants misled investors about the risks and impairments to CIT’s subprime home loan and private (non government guaranteed) student loan portfolio and failed to adequately reserve for the impairments to those loan portfolios in accordance with Generally Accepted Accounting Principles. Lead Plaintiff asserts that as a result of these and other actions, the market price of CIT’s common stock was artificially and improperly inflated between December 12, 2006 and March 5, 2008 and that the offering price of CIT-Z securities was improperly inflated. Thus, Lead Plaintiff alleges that Settlement Class Members overpaid for CIT common stock and CIT-Z securities purchased during the relevant time periods. Defendants have vigorously denied and continue to vigorously deny that they did anything wrong.