In re Wilmington Trust Securities Litigation
|Court:||United States District Court for the District of Delaware|
|Judge:||Hon. Sue L. Robinson|
|Class Period:||01/18/2008 - 11/ 1/2010|
|Case Contacts:||Hannah Ross, Lauren McMillen Ormsbee, Richard D. Gluck, Katherine M. Sinderson, Jake Nachmani|
This is a securities class action on behalf of a class of persons and entities who purchased or acquired the shares of Wilmington Trust Corporation ("Wilmington Trust") between January 18, 2008 and November 1, 2010.
On March 7, 2011, Hon. Leonard P. Stark, U.S. District Judge for the District of Delaware, entered an Order appointing the Institutional Investor Group (consisting of the Merced County Employees' Retirement Association, the Coral Springs Police Pension Fund, the St. Petersburg Firefighters' Retirement System, the Pompano Beach General Employees Retirement System, and the Automotive Industries Pension Trust Fund) as Lead Plaintiff and appointing BLB&G as Co-Lead Counsel for the Class. The Action was subsequently reassigned to U.S. District Court Judge Sue Robinson.
This action brings claims for violations of the federal securities laws by Wilmington Trust, CEO and Chairman Donald E. Foley, former CEO and Chairman Ted T. Cecala, CFO David R. Gibson, COO Robert V.A. Harra, Jr., former Chief Credit Officer William North, Controller Kevyn N. Rakowski, Wilmington's Board of Directors and Audit Committee, outside auditor KPMG LLP, and underwriters J.P. Morgan Securities and Keefe, Bruyette & Woods, Inc.
Plaintiffs allege that Defendants violated the Securities Exchange Act of 1934 by concealing the drastic deterioration of Wilmington Trust's loan portfolio and improperly accounting for the value of its loans under Generally Accepted Accounting Principles. In particular, Defendants understated Wilmington Trust's provision for loan losses as its loan portfolio declined in quality, improperly delayed recognition of losses on the portfolio, and inflated its financial results by misstating the fair value of its loan portfolio. Defendants' misconduct served to artificially inflate the price of Wilmington Trust securities during the Class Period.
Plaintiffs also allege that Defendants violated the Securities Act of 1933 by issuing untrue statements in connection with the Company's February 23, 2010 public equity offering, including by understating Wilmington Trust's provision for loan losses.
Upon revelation of the truth about Wilmington Trust's loan portfolio and loan loss provisions through a series of disclosures in 2010, the price of Wilmington Trust securities dropped sharply, causing the Class to incur substantial losses.
On May 16, 2011, Lead Plaintiffs filed a Consolidated Securities Class Action Complaint. Following briefing on Defendants’ motions to dismiss, on March 29, 2012, the Court entered an order dismissing the Complaint with leave to replead. Lead Plaintiffs filed a second amended complaint on April 30, 2012. Following public disclosure of facts in a related federal investigation of one of Wilmington Trust’s borrowers, Lead Plaintiffs filed a third amended complaint on January 9, 2013 containing additional facts supporting Lead Plaintiffs’ allegations. Following a former senior bank executive’s guilty plea to conspiracy to commit bank fraud, Lead Plaintiffs filed a Fourth Amended Complaint on May 30, 2013, containing further facts supporting Lead Plaintiffs’ allegations.
On March 20, 2014, the Court issued an Order sustaining the Fourth Amended Complaint in all material respects.The Case has proceeded into discovery.
On September 12, 2014, Lead Plaintiffs filed their Motion for Class Certification, through which they sought to certify a Class of all investors who were damaged as a result of the challenged activity. On September 3, 2015, the Court issued a Memorandum and Order granting Lead Plaintiffs’ motion and certified the Class. A copy of the Notice of Pendency of Class Action, which states the definition of the certified Class, is available on the Case Documents page.