The Student Loan Corporation

The Student Loan Corporation (NYSE: STU)

MURRAY FRANK LLP is investigating securities fraud claims against the Student Loan Corporation (“SLC” or the “Company”) (NYSE:STU) and certain of its officers, on behalf of purchasers of SLC securities between January 15, 2008 and September 23, 2010, inclusive (the “Class Period”).

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The investigation concerns violations of the Securities Exchange Act of 1934 (the “Exchange Act”) that occurred when the Company and certain of its officers issued materially false and misleading statements during the Class Period regarding SLC’s business operations and prospects.    

Specifically, it is alleged that during the Class Period, the Defendants made false and misleading statements about the Company’s operations and business products.  Specifically, during the Class Period, Defendants made false and misleading statements about or knew but failed to disclose that: (1) the Company failed to perform adequate due diligence when lending to high risk borrowers; (2) the Company had not increased its underwriting standards, as represented; (3) the Company was experiencing a high level of default on its student loan portfolios; (4) the Company failed to take proper impairment charges on its non-performing loan portfolio assets, as required by Generally Accepted Accounting Principals (“GAAP”); (5) the Company’s loan loss provisions were inadequate, and too low to cover the probable defaults on its high risk student loans; and (4) as a result, the Company’s stock traded at artificially high prices.    

On September 23, 2011, SLC announced that it had entered into an agreement to be acquired by a wholly-owned subsidiary of Discovery Bank.  In conjunction with the announcement, the Company revealed for the first time that nearly $1 billion of its loans that had been carried as viable assets on its books were in fact nearly worthless.  Following the news, the Company’s stock price, which was as high as $135 per share during the Class Period, dropped to a Class Period low of less than $30 per share.  

If you purchased SLC securities within the Class Period, you may move the Court, not later than April 3, 2012, to serve as Lead Plaintiff for the class.  A Lead Plaintiff is a representative chosen by the Court who acts on behalf of other class members in directing the litigation.  You do not need to be a Lead Plaintiff to be included in the class.  If you wish to discuss this investigation, or have any questions concerning this notice or your rights or interests with respect to these matters, please contact us.

Bridget Hamill
[email protected]