Citigroup/Discover Defeats Securities Class Action Challenging Financial Disclosures

Skadden achieved a complete victory on behalf of Student Loan Corporation (SLC) and its former officers, as well as Citigroup Inc. and Discover Financial Services, in securing the dismissal with prejudice of a shareholder class action alleging SLC failed to maintain adequate loan loss reserves and issued false and misleading financial disclosures. On June 26, Judge Naomi Reice Buchwald of the U.S. District Court for the Southern District of New York dismissed the case, agreeing with both of Skadden's arguments that the claims were barred by a previously reached broad settlement agreement (which Skadden negotiated) and that the plaintiffs failed to state a securities fraud claim.