Fifth Third Bancorp Class Action Lawsuit
- Company Name
- Fifth Third Bancorp
- Stock Symbol
- Class Period
- February 26, 2016 to March 6, 2020
- Northern District of Illinois
The Fifth Third Bancorp securities class action lawsuit charges Fifth Third and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Fifth Third securities between February 26, 2016 and March 6, 2020 (the “Class Period”). The Fifth Third securities class action lawsuit was commenced on April 7, 2020 in the Northern District of Illinois and is captioned Christakis v. Fifth Third Bancorp., No. 20-cv-2176.
Headquartered in Cincinnati, Ohio, Fifth Third is the indirect holding company of Fifth Third Bank, N.A. (“Fifth Third Bank”), which operates as a diversified financial services company in the United States. As of June 30, 2019, Fifth Third operated 1,207 full-service banking centers and 2,551 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, and North Carolina.
The Fifth Third securities class action lawsuit alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose that: (i) as a result of Fifth Third Bank’s aggressive incentive policies to promote its cross-sell strategy, Fifth Third Bank employees engaged in unauthorized conduct with customer accounts; (ii) since at least 2008, Fifth Third Bank, and by extension, Fifth Third, was aware of such unauthorized conduct and, thus, was violating relevant regulations and laws aimed at protecting consumers; (iii) Fifth Third failed to properly implement and monitor its cross-sell program, detect and stop misconduct, and identify and remediate harmed consumers; (iv) all the foregoing subjected Fifth Third to a foreseeable risk of heightened regulatory scrutiny or investigation; and (v) Fifth Third’s revenues were in part the product of unlawful conduct and thus were unsustainable. As a result of this information being withheld from the market, Fifth Third securities traded at artificially inflated prices during the Class Period, with the price of Fifth Third’s stock reaching a high of more than $34 per share.
On March 2, 2020, Fifth Third filed an Annual Report on Form 10-K with the U.S. Securities and Exchange Commission reporting Fifth Third’s financial and operating results for the quarter and year ended December 31, 2019 (the “2019 10-K”). According to the 2019 10-K, the U.S. Consumer Financial Protection Bureau (“CFPB”) had “notified Fifth Third that it intend[ed] to file an enforcement action in relation to alleged unauthorized account openings.” As the market digested this information, the price of Fifth Third stock fell $0.72 per share, or nearly 3%, over the following trading sessions to close at $23.68 per share on March 5, 2020. However, the true scope of Fifth Third’s alleged wrongdoing, and potential liability with respect to unauthorized account openings, was left undisclosed in the 2019 10-K, and was actively downplayed by Fifth Third, thereby causing Fifth Third’s stock to continue to trade at artificially inflated prices throughout the remainder of the Class Period.
Finally, on March 9, 2020, the CFPB announced that it had filed a lawsuit against Fifth Third Bank in federal court, disclosing significant additional information concerning its investigation into Fifth Third, which Fifth Third had previously failed to disclose. Specifically, the CFPB “allege[d] that for several years,” and until at least 2016, “Fifth Third [Bank], without consumers’ knowledge or consent: opened deposit and credit-card accounts in consumers’ names; transferred funds from consumers’ existing accounts to new, improperly opened accounts; enrolled consumers in unauthorized online-banking services; and activated unauthorized lines of credit on consumers’ accounts.” The CFPB further alleged that, “despite knowing since at least 2008 that employees were opening unauthorized consumer-financial accounts, Fifth Third [Bank] took insufficient steps to detect and stop the conduct and to identify and remediate harmed consumers.” Consequently, the CFPB concluded that Fifth Third Bank had “violated the Consumer Financial Protection Act’s prohibition against unfair and abusive acts or practices as well as the Truth in Lending Act and the Truth in Savings Act and their implementing regulations.” On this news, the price of Fifth Third stock fell $0.64 per share, or approximately 3.5%, to close at $17.66 per share on March 11, 2020, and fell an additional $1.76 per share the following trading day to close at $15.90 per share on March 12, 2020 – a two-day decline of more than 13%.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.