Robbins Arroyo LLP: Navient Corporation (NAVI) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed in the U.S. District Court for the District of Delaware. The complaint alleges that officers and directors of Navient Corporation (NASDAQGS: NAVI) violated the Securities Exchange Act of 1934 between May 9, 2014 and February 5, 2016, by making materially false and misleading statements about Navient’s business prospects. Navient provides financial products and services in the United States.
Navient Accused of Using Loan Servicing Practices in Violation of Federal Regulations
According to the complaint, during 2014 through 2016, Navient filed several Form 10-Q’s and Form 10K’s with the U.S. Securities and Exchange Commission touting the company’s robust compliance culture driven by a “customer first” approach. Navient disclosed in these filings that its wholly-owned subsidiary, Navient Solutions, Inc. (“NSI”), had received a Civil Investigative Demand (“CID”) from the Consumer Financial Protection Bureau (“CFPB”) as part of its investigation relating to Navient’s disclosures and assessment of late fees. Navient further disclosed that NSI’s subsidiary, Pioneer Credit Recovery, Inc. (“Pioneer”), received a CID from the CFPB as part of its investigation regarding Pioneer’s activities relating to rehabilitation loans and collection of defaulted student debt. However, the complaint alleges that Navient officials failed to disclose that the company’s loan servicing practices were not in compliance with federal regulations, and that this non-compliance could subject the company and its subsidiaries to restitution, civil monetary penalties, and corrective actions.
On August 24, 2015, Navient reported that on August 19, 2015, NSI had received a Notice and Opportunity to Respond and Advise letter. The letter stated that the CFPB was considering taking legal action against NSI related to the previously disclosed investigation regarding assessing late fees on student loans and other related misconduct, and that the CFPB might seek restitution, civil monetary penalties, and corrective action against NSI. On this news, the company’s stock fell $1.01 per share, or 7.7%, to close at $12.05 per share on August 25, 2015. On February 6, 2016, U.S. presidential candidate Hillary Clinton directed public attention to the subject of the CFPB’s investigation of Navient during a speech at New England College in New Hampshire, stating that Navient’s “behavior is outrageous” and that the company has been “misleading people” and “doing some really terrible things.” On this news, Navient stock fell $0.57 per share, or nearly 6%, to close at $8.94 per share on February 8, 2016.
Navient Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.