Law firm Kirby (NYSE:KEX) McInerney LLP has initiated class action suits against two major financial institutions, Comerica Incorporated (NYSE:CMA) and Discover Financial Services (NYSE:DFS), on behalf of investors who acquired securities within specific periods. The lawsuits were confirmed on Wednesday.
The case against Comerica Incorporated is on behalf of investors who acquired securities between February 9, 2021, and May 29, 2023. The lawsuit follows a report by American Banker that exposed violations in the operations of the Direct Express program run by i2c Inc. and Conduent (NASDAQ:CNDT) Inc. The report led to a 3.59% drop in Comerica's share price to $36.10 on May 31, 2023.
According to InvestingPro data, Comerica's market cap stands at 5170M USD with a P/E ratio of 4.06, indicating a low earnings multiple. The company has experienced a revenue growth of 22.34% LTM2023.Q2 and a quarterly growth of 8.79% in FY2023.Q2. Despite the recent drop in share price, the company has a track record of maintaining dividend payments for 53 consecutive years, with a current dividend yield of 7.17% as per InvestingPro data.
InvestingPro Tips suggest that the stock is in oversold territory, and the company trades at a low P/E ratio relative to near-term earnings growth. It's also worth noting that Comerica has been profitable over the last twelve months. However, 5 analysts have revised their earnings downwards for the upcoming period, which could be a cause for concern among investors.
The lawsuit alleges that Comerica did not comply with the Federal Contract and Regulation E due to false statements and inadequate fraud prevention measures. Investors interested in becoming lead plaintiffs have until October 20, 2023, to apply.
The second lawsuit filed by Kirby McInerney LLP is against Discover Financial Services. The firm alleges that Discover made misleading statements and failed to disclose misclassified credit card products, poor student loan servicing practices, and an FDIC proposed consent order.
The suit was filed in the Northern District of Illinois following several significant events including the resignation of CEO Roger C. Hochschild, an increase in the credit card delinquency rate, and potential significant financial exposure and reputational harm for Discover Financial Services.
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