RADNOR, Pa., Aug. 22 PA-Schiffrin-CITGroup
RADNOR, Pa., Aug. 22 /PRNewswire/ -- The following statement was issued
today by the law firm of Schiffrin Barroway Topaz & Kessler, LLP:
Notice is hereby given that a class action lawsuit was filed in the United
States District Court for the Southern District of New York on behalf of all
purchasers of securities of CIT Group Inc. (NYSE: CIT) ("CIT" or the
"Company") from April 18, 2007 through March 5, 2008, inclusive (the "Class
Period").
If you wish to discuss this action or have any questions concerning this
notice or your rights or interests with respect to these matters, please
contact Schiffrin Barroway Topaz & Kessler, LLP (Darren J. Check, Esq. or
David M. Promisloff, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or
via e-mail at info@sbtklaw.com.
The Complaint charges CIT and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. CIT is a commercial finance
company that provides financial products and advisory services. More
specifically, the Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts which were known to
defendants or recklessly disregarded by them: (1) that the Company had made
tens of millions of dollars of loans to students attending Silver State
Helicopter ("Silver State"), and that there was little chance of their
repayment; (2) that the Company should have taken a write-down for the Silver
State loans in its financial statements; (3) that as a result, the Company's
financial statements were not prepared in accordance with Generally Accepted
Accounting Principles ("GAAP"); (4) that the Company lacked adequate internal
and financial controls; and (5) that, as a result of the foregoing, the
Company's financial statements were materially false and misleading at all
relevant times.
Up until very recently, CIT had participated in the student loan market
through its Student Loan Xpress unit. The majority of CIT's private student
loans were made to non-traditional schools, which have a lower graduation rate
than traditional schools (the graduation rate being a critical factor in a
borrower's ability to pay back a loan). CIT had been making private loans to
students attending Silver State, a non-traditional school.
As of December 31, 2007, Silver State students accounted for $196 million
in CIT's outstanding student loans, an astounding 32 percent of CIT's $599.3
million of finance receivables related to private student loans. On January
31, 2008, Citibank announced that it would refuse to make any additional
private student loans to Silver State students, due to its strong suspicion
that the loans would not be repaid. The following day, on February 1, 2008,
Silver State declared bankruptcy and ceased all operations. It was
subsequently revealed that Silver State had assets of only $50,000 and
liabilities in the tens of millions of dollars.
On March 6, 2008, investors were shocked when Keefe, Bruyette & Woods
issued an analyst report that lowered CIT's first quarter 2008 earnings per
share estimate from $0.76 to $0.08. The report stated that CIT would be
forced to write-down a significant portion of its private student loan
portfolio. Upon the release of this news, the Company's shares fell $4.50 per
share, or 22.10 percent, to close on March 6, 2008 at $15.86 per share, on
unusually heavy trading volume.
Plaintiff seeks to recover damages on behalf of class members and is
represented by the law firm of Schiffrin Barroway Topaz & Kessler which
prosecutes class actions in both state and federal courts throughout the
country. Schiffrin Barroway Topaz & Kessler is a driving force behind
corporate governance reform, and has recovered billions of dollars on behalf
of institutional and individual investors from the United States and around
the world.
For more information about Schiffrin Barroway Topaz & Kessler or to sign
up to participate in this action online, please visit http://www.sbtklaw.com
If you are a member of the class described above, you may, not later than
September 23, 2008, move the Court to serve as lead plaintiff of the class, if
you so choose. A lead plaintiff is a representative party that acts on behalf
of other class members in directing the litigation. In order to be appointed
lead plaintiff, the Court must determine that the class member's claim is
typical of the claims of other class members, and that the class member will
adequately represent the class. Your ability to share in any recovery is not,
however, affected by the decision whether or not to serve as a lead plaintiff.
Any member of the purported class may move the court to serve as lead
plaintiff through counsel of their choice, or may choose to do nothing and
remain an absent class member.
CONTACT: Schiffrin Barroway Topaz & Kessler, LLP
Darren J. Check, Esq.
David M. Promisloff, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-888-299-7706 (toll free) or 1-610-667-7706
Or by e-mail at info@sbtklaw.com
SOURCE Schiffrin Barroway Topaz & Kessler, LLP
