New York, New York--(Newsfile Corp. - October 2, 2020) - Faruqi & Faruqi, LLP, a leading minority and certified woman-owned national securities law firm, is investigating potential claims against Credit Acceptance Corporation ("Credit Acceptance" or the "Company") (NASDAQ: CACC).
If you suffered losses exceeding $100,000 investing in Credit Acceptance stock or options between November 1, 2019 and August 28, 2020 and would like to discuss your legal rights, click here: www.faruqilaw.com/CACC. There is no cost or obligation to you.
You can also contact Faruqi & Faruqi partner James Wilson toll free at 877-247-4292 or 212-983-9330 (Ext. 1310) or by emailing him at firstname.lastname@example.org to discuss your rights and options.
A lawsuit has been filed in the U.S. District Court for the Eastern District of Michigan on behalf of all those who purchased Credit Acceptance common stock between November 1, 2019 and August 28, 2020 (the "Class Period"). The case, Palm Tran, Inc. Amalgamated Transit Union Local 1577 Pension Plan v. Credit Acceptance Corporation et al., No. 2:20-cv-12698 was filed on October 2, 2020, and has been assigned to Judge Linda V. Parker.
As detailed below, the lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) that the Company was topping off the pools of loans that they packaged and securitized with higher-risk loans; (2) that Credit Acceptance was making high interest subprime auto loans to borrowers that the Company knew borrowers would be unable to repay; (3) that the borrowers were subject to hidden finance charges, resulting in loans exceeding the usury rate ceiling mandated by state law; (4) that Credit Acceptance took excessive and illegal measures to collect debt from defaulted borrowers; (5) that, as a result, the Company was likely to face regulatory scrutiny and possible penalties from various regulators or lawsuits; and (6) that, as a result of the foregoing, Defendants positive statements about the Company's business, operations, and adherence to appropriate laws and regulations were materially misleading and/or lacked a reasonable basis
On August 28, 2020, the Massachusetts Attorney General, Maura Healey, filed the stunning Mass AG Complaint in Suffolk County Superior Court against Credit Acceptance for allegedly making unfair and deceptive auto loans to thousands of Massachusetts consumers, providing investors with false or misleading information regarding auto securities they offered, and engaging in unfair debt collection practices.
Then, on August 31, 2020, the Massachusetts AG published a press release announcing the lawsuit against Credit Acceptance. In the press release, AG Healey stated, "This company made unaffordable and illegal loans to borrowers, causing them to fall into thousands of dollars of debt and even lose their vehicles. We are taking a close look at this industry and we will not allow companies to profit by violating our laws and exploiting consumers." Additionally, the release points out that this lawsuit is part of AG Healey's "review of securitization practices in the subprime auto market-an industry-wide investigation that remains ongoing."
In response to the public disclosure of the Mass AG Complaint, Credit Acceptance's stock price declined precipitously from $459.43 at close on August 28, 2020 down to $374.07 at the close of trading on September 1, 2020-an $85.36 drop equating to an 18% two-day decline in share price.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative 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. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Credit Acceptance's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/65164