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DFS.US
id: 168

Discover Financial Services (DFS) Oversight Issues Case

N.D. Illinois
Court
1:23-cv-06788
Case number
21 Feb 2019
Class period Start
14 Aug 2023
Class period End
30 Oct 2023
Lead Plaintiff motion deadline
  • Seeking Alpha published an article reporting on analyst speculation that CEO Hochschild’s resignation was directly tied to DFS’s recently reported regulatory and risk oversight issues.
  • On this news, $DFS fell 9.44%, damaging shareholders.
  • Investors suspect DFS and certain executives of misleading about and failing to disclose over regulatory and risk oversight issues.
On August 14, 2023, DFS issued a press release announcing that its Board of Directors and Roger C. Hochschild “have agreed that Hochschild will step down as CEO” and President and as a member of the Board”.
  • The press release also quoted DFS’s Chair of the Board, who assured investors that “the Board is continuously focused on Discover reaching its full potential across the business, including our commitment to enhancing compliance, risk management and corporate governance.”
  • The same day, in an exhibit to an SEC filing, DFS also disclosed that its credit card delinquency rate increased to 3.00% for the 24 months ended July 31, 2023, as compared to 2.86% for the 24 months ended June 31, 2023.
  • As reported by Seeking Alpha that day, the Company’s credit card delinquency rate now stood at a higher level than the pre-pandemic rate of 2.37% in July 2019.
  • On August 15, 2023, Seeking Alpha published an article reporting on analyst speculation that Hochschild’s resignation was directly tied to DFS’s recently reported regulatory and risk oversight issues.
On this news, $DFS fell 9.44%, damaging shareholders.

Going back on July 19, 2023, DFS disclosed that it had misclassified certain credit card products over an approximately 15-year period as a result of an acknowledged compliance failure. In addition, the Company disclosed receipt of a proposed consent order from FDIC in connection with an unrelated regulatory matter. On this news, $DFS fell 15.92%

Earlier, On July 20, 2022, Discover Financial Services issued a Q2 2022 financial results press release announcing that it is suspending its existing share repurchase program because of an internal investigation "relating to its student loan servicing practices and related compliance matters. The investigation is ongoing and is being conducted by a board-appointed independent special committee." On this news, Discover Financial Services share prices fell by 8.9%.

Considering all facts, Investors have reasons to suspect DFS and certain executives of misleading about and failing to disclose over regulatory and risk oversight issues.
Alleged Offence
Misleading Statements
Failure to Disclose
Negligence
Omissions
Suspected Party
Directors
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
15 August 2023
Filing date
01 September 2023
Lead Plaintiff Deadline
30 October 2023
Collecting participants…

Discover Financial Services

Discover Financial Services, through its subsidiaries, provides digital banking products and services, and payment services in the United States. It operates in two segments, Digital Banking and Pa...

    Ticker
    DFS.US
    ISIN
    US2547091080
    CIK
    1393612
    Sector
    Financial Services
    Industry
    Credit Services
    Country
    USA
    Address
    2500 Lake Cook Road, Riverwoods, IL, United States, 60015