American Express Co.

Class Period: Mar 1, 2007 to Nov 12, 2008

Lead Plaintiff Deadline: Apr 21, 2009 + Deadline passed

Summary of Case:

A securities class action has been filed against American Express Co. (Ticker: AXP) ("American Express" or the "Company") on behalf of all securities purchasers from March 1, 2007 through November 12, 2008 (Class Period) in the United States District Court for the Southern District of New York.

The complaint alleges that the defendants misled investors by falsely representing American Express's Exposure to the riskiest credit card holders. Such reassurances were repeated by defendants throughout the Class Period in order to artificially support American Express' stock price as the building credit crisis in the market punished most companies that dealt with risky customers.  

The representations contained in American Express's press releases, SEC filings, conference calls, and presentations during the Class Period were materially false and misleading when made because they failed to disclose the Company's increasing reliance on riskier credit card programs. 

On July 21, 2008, after American Express missed analysts' estimates for Q2'07 and the Company withdrew its 2008 guidance, an analyst from Friedman Billings Ramsey & Co. ("Friedman Billings") opined that the greater-than-expected shortfall resulted from "rapid growth in lending balances over recent years." American Express shares dropped 7.1 1% the next day to close at $37.99 per share on this news. Profit in American Express's U.S. card business plunged 96% as the provision for losses more than doubled to $1.5 billion from $640 million. Uncollectible debt rose to 5.3% of loans from 2.9% a year earlier.  

Additional corrective disclosures through the end of the Class Period revealed the full extent of American Express's exposure to risky credit card holders, causing the Company's stock to fall to $20.05 per share on November 12, 2008 after the final curative disclosure was digested by the market.

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.