CASES
Northern Trust Corp.
Class Period: Oct 17, 2007 to Oct 20, 2009
Lead Plaintiff Deadline: Oct 25, 2010 + Deadline passed
Summary of Case:
A class action has been filed against Northern Trust Corp. (NTRS) ("Northern Trust" or the "Company) on behalf of all securities purchasers from October 17, 2007 through October 20, 2009, inclusive ("Class Period"), in the United States District Court for the Northern District of Illinois.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding Northern Trust's business and financial results and engaged in improper behavior that harmed Northern Trust's investors by failing to disclose the extent of its seriously delinquent commercial real estate loans and the true nature and risks associated with its once highly profitable securities lending program. As a result of defendants' false statements, Northern Trust's stock traded at artificially inflated prices during the Class Period, reaching a high of $87.20 per share on September 11, 2008. While Northern Trust's stock was artificially inflated due to defendants' false statements, certain top officers and directors of the Company sold over 1.5 million shares of their Northern Trust stock for proceeds of over $106.5 million.
Then, on October 21, 2009, before the market opened, Northern Trust reported its third quarter 2009 earnings results, announcing third quarter results that fell short of expectations due in part to a serious decline in the Company's securities lending program and to continuing pressure from its non-performing loans. On this news, Northern Trust's stock fell $3.29 per share to close at $54.16 per share on October 21, 2009, a one-day decline of nearly 6% on volume of over 8.55 million shares.
Furthermore, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) defendants failed to properly account for Northern Trust's commercial real estate loans, failing to reflect impairment in the loans; (b) Northern Trust had not adequately reserved for loan losses such that its financial statements were presented in violation of Generally Accepted Accounting Principles; (c) Northern Trust had not disclosed the true risk associated with the Company's securities lending program, as the Company was engaging in excessively risky investment practices by investing collateral pools in high risk investments; (d) the disruption to the Company's securities lending program was not temporary and would significantly impact the Company's business and outlook; and (e) the deterioration in the Company's operating results from its securities lending business was not primarily attributable to negative returns associated with one of its collateral funds that used mark-to-market accounting or to a decline in overall borrowing demand, but rather, in large part, to an overall decline in the supply of securities available for loans.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.