Robbins Arroyo LLP: OneMain Holdings, Inc. (OMF) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against OneMain Holdings, Inc. (NYSE: OMF) in the U.S. District Court for the Southern District of Indiana, Evansville Division. The complaint is brought on behalf of all purchasers of OneMain Holdings, Inc. securities between March 3, 2015 and November 7, 2016, for alleged violations of the Securities Exchange Act of 1934 by OneMain Holdings, Inc.’s officers and directors. OneMain Holdings, Inc., through its subsidiaries, provides consumer finance and insurance products and services. OneMain Holdings, Inc. was formerly known as Springleaf Holdings, Inc. (“Springleaf”) until Springleaf purchased OneMain Financial Holdings, LLC (“OneMain Financial”), and the combined company was named OneMain Holdings, Inc. (“OneMain”).
OneMain Accused of Misrepresenting the Growth Potential of Its Merger
According to the complaint, on March 3, 2015, Springleaf entered into a definitive merger agreement to acquire OneMain Financial from CitiFinancial Credit Company, a wholly-owned subsidiary of Citigroup. In a press release on March 12, 2015, Jay N. Levine, President and Chief Executive Officer of Springleaf at that time, touted OneMain Financial’s position as a leading national provider of personal loans, stating, “[w]e look forward to … building on the enormous potential of the combined company.” Subsequently, the company predicted an optimistic financial outlook, stating that it expected to generate core net income of $830 million to $900 million in 2017. Levine further stated, “As we continue to execute on the integration of the two companies, we are further strengthening our foundation for continued growth and strong returns.” However, the complaint alleges that OneMain officials omitted material information regarding the projected net income to be achieved by the company following the merger.
On November 8, 2016, during a conference call with investors, OneMain disclosed that it was slashing guidance for full-year 2016 and 2017 with respect to the growth in its loan portfolios and its preferred measure of earnings. In particular, the company revealed that it would lower its guidance for its consumer insurance adjusted earnings per share from $4.20-$4.70 per share to a range of $3.60-$3.70 per share for 2016 and from $5.60-$6.10 per share to $3.75-$4.00 per share for 2017. Further, the company stated that it would lower guidance for receivables growth in 2016 from 10-15% to 5% and in 2017 from 10-15% to 5-10%. On this news, OneMain’s share price declined by $10.67 per share, or approximately 38%, to close at $16.90 per share on November 8, 2016.
OneMain 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.
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