Robbins LLP Announces that Santander Consumer USA Holdings Inc. (SC) Securities Class Action Survives Motion to Dismiss
January 9, 2018 – Shareholder rights law firm Robbins LLP is investigating whether certain officers and directors of Santander Consumer USA Holdings Inc. (NYSE: SC) breached their fiduciary duties to shareholders. On December 20, 2016, investors filed an amended securities class action complaint against Santander for alleged violations of the Securities Exchange Act of 1934. The complaint alleges that Santander misclassified loans held by the company and applied an incorrect discount rate to the company’s troubled debt restructurings, causing it to understate its allowance for credit losses. Because of the company’s violations of generally accepted accounting principles, Santander materially overstated its net income, resulting in multiple restatements covering fiscal years 2014 and 2015, and the quarters within those periods. Before the market became aware of these overstatements and while Santander’s stock price was artificially inflated, Santander’s Chief Executive Officer resigned and cashed out his entire 10% ownership for approximately $928 million. On January 3, 2018, the Honorable Ed Kinkeade of the U.S. District Court for the Northern District of Texas, Dallas Division denied Santander’s motion to dismiss.