Navient to Face Investor Claims Over Student Loan Reporting
A Delaware federal judge ruled Tuesday that Navient Corp., one of that nation's largest servicers of student loans, must face claims that it had pumped up its stock price by hiding serious problems with its loan portfolio and other risks from investors.
January 30, 2019 at 05:58 PM
4 minute read
A Delaware federal judge ruled Tuesday that Navient Corp., one of that nation's largest servicers of student loans, must face claims that it had pumped up its stock price by hiding serious problems with its loan portfolio and other risks from investors.
The ruling, from U.S. District Judge Maryellen Noreika, trimmed some claims from the securities class action, but also found reason to believe that top executives at the Wilmington-based Sallie Mae spin-off knew the firm was under-reporting the number of delinquent accounts on its books.
The plaintiffs, led by mutual fund manager Lord Abbett Affiliated Fund, are seeking to recover more than $13 million they say the company lost as a result of Navient's ”pervasive and systemic” practice of granting forbearance to struggling student-loan borrowers instead of marking the accounts delinquent or in default.
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