Fifth Third Bancorp (FITB) Accused of Misleading Shareholders
According to the complaint for alleged violations of the Securities Exchange Act of 1934 between February 26, 2016 and March 6, 2020, throughout the relevant period, Fifth Third Bancorp (FITB) continuously touted its “cross-sell” strategy to increase products and services and its robust compliance risk management systems. Then, on March 2, 2020, Fifth Third disclosed in its annual report for 2019 that the U.S. Consumer Financial Protection Bureau (“CFPB”) “notified Fifth Third that it intends to file an enforcement action in relation to alleged unauthorized account openings.” Finally, on March 9, 2020, the CFPB announced that it filed a lawsuit against Fifth Third in federal court alleging that for several years and until at least 2016, “Fifth Third without consumer’s 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 Fifth Third knew of the wrongdoing since 2008 but failed to take sufficient steps to stop the conduct and remediate harmed consumers. On this news, Fifth Third’s stock price fell 13% over the next three trading days to close at $15.90 per share.