CIT Group Inc. (NYSE:CIT) won preliminary court approval of a $75 million settlement Friday against shareholder allegations that the firm misled them about its exposures to risky mortgages and student loans.
Shareholders claimed the company said it maintained conservative loan portfolios and had reserves prepared for expected losses. As CIT’s share price tumbled, however, the losses grew, and the truth came out.
In November 2009, the company filed for bankruptcy protection, leading to a loss of $2.3 billion of taxpayer bailout money, then came out from Chapter 11 the following month.
The class in the suit includes investors who owned shares between December 12, 2006, and March 5, 2008, and those who bought preferred stock in October 2007.
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