FleetCor Technologies, a business payment company based in metro Atlanta, has agreed to settle a class action securities fraud lawsuit for $50 million in cash, according to court filings.

Counsel for the City of Sunrise General Employees' Retirement Plan, a public pension fund in suburban Miami that is lead plaintiff in the case, filed a notice seeking preliminary approval of the proposed settlement on Nov. 7. The case is before U.S. District Judge Leigh Martin May.

The suit, filed in federal court in Atlanta in 2017, stems from allegations that FleetCor's top executives drove—but didn't disclose to investors—predatory fee practices that artificially inflated FleetCor stock prices between  February 2016 and May 2017, court filings say. The company, which went public in 2010, built its reputation by producing fuel cards that businesses use at gas stations when filling up fleet vehicles.

The suit alleged that FleetCor trained its sales staff to advertise its products have no fees, although the company allegedly instituted a three-month delay before applying fees on individual cards without notice, according to court documents.

The suit claimed that hundreds of millions of dollars in profits allegedly resulting from the delayed applications of charging fees bolstered FleetCor's revenue growth statements, which allegedly didn't mention that company revenue was derived in part from fees. Those alleged omissions, in turn, artificially boosted FleetCor stock prices, and FleetCor Chairman and CEO Ronald Clark and CFO Eric Dey took advantage of the inflated share price to allegedly enrich themselves via insider sales, the suit claimed.

The class action suit was filed after an investment newsletter, Citron Research, issued a report outlining the allegedly deceptive fee strategy in 2017. It also came after Chevron, once FleetCor's largest oil company partner, sued FleetCor over the fee scheme, court documents said.

May certified the class in July.

The proposed settlement agreement was signed by Katherine Sinderson, a partner at New York's Bernstein Litowitz Berger & Grossmann and counsel for the pension fund; Lamar "Mickey" Mixson, a partner at Atlanta's Bondurant, Mixson & Elmore as the fund's liaison counsel; and Stuart Kaufman, a partner at Florida firm Klausner, Kaufman, Jensen and Levinson.

FleetCor was represented by a team of King & Spalding attorneys, including partners Warren Pope, Michael R. Smith, and Ronni Solomon; counsel Bethany Rezek; and Troutman Sanders counsel Alexandra Peurach.

The proposed settlement followed a mediation before JAMS' Jed D. Melnick of Weinstein Melnick.

FleetCor, Pope, Smith and Peurach couldn't be reached for comment.

The proposed agreement also includes a provision for plaintiff's legal fees. According to the agreement, plaintiffs' counsel have litigated the case on a contingency basis since the complaint was filed in 2017. The agreement said that lead counsel intends to apply for an award of attorney fees not to exceed 25%—$12.5 million—of the settlement fund and no more than $450,000 in expenses.

According to the preliminary agreement, the maximum potential damages that could be realistically established at trial ranged from $114.8 million to $584.8 million.

A settlement was reached in principle after the plaintiffs partially defeated a motion to dismiss and successfully secured class certification. But plaintiffs' counsel acknowledged they "faced substantial challenges in proving that [the] defendants' statements about FleetCor's organic revenue growth were false and misleading when made, as well as showing that FleetCor's predatory fee practices (versus any non-predatory fees) generated a material amount of the company's organic revenue growth."

The Sunrise pension fund "would have also faced challenges in proving that [the] defendants made the alleged false statements with the intent to mislead investors or were reckless in making the statements," the motion to approve the proposed settlement agreement said. Plaintiffs' counsel also acknowledged that FleetCor was likely to argue that its top executives "were not aware of the alleged predatory fee practices and that, even if they were, they thought those practices were lawful and consistent with the terms governing FleetCor's relationship with its customers."