Bank to pay $1 billion to settle investors’ compliance claims
Last month, the U.S. District Court for the Southern District of New York preliminarily approved a securities litigation settlement that would require a national bank to pay $1 billion to resolve class claims that it misrepresented its progress in overhauling its internal controls and compliance processes. The required overhauls relate to consent orders entered between the bank and its regulators in 2018 concerning alleged improper banking practices and corporate oversight deficiencies. The settlement would resolve investors’ claims that the bank’s allegedly misleading statements artificially inflated the price of the bank’s common stock, which declined when additional information was revealed. The bank expressly denies that the lead plaintiffs “have asserted any valid claims,” and denies “any and all allegations of fault, liability, wrongdoing, or damages.” If granted final approval, the bank would be required to pay $1 billion into a fund to be distributed to certain affected investors.