Santander Consumer USA Holdings
We have seen plenty of settlements from the subprime housing market collapse in 2008, but what about subprime auto-lending? Well, you’re in luck. We have one today. Santandar Consumer USA Holdings recently settled a securities class action suit indirectly based on the subprime vehicle market. The total settlement fund is $47 million, and claim forms are due on January 4, 2021.
Santander Consumer USA Holdings, aka SCUSA, is a subprime auto-lender that had its IPO in January of 2014. According to the plaintiff complaint, SCUSA “enticed investors promises of a payout of 30% of its annual earnings in the form of dividends.” This was an unrealistic prediction, and a misleading one, according to the plaintiffs, since SCUSA did not disclose how beholden the company was to it’s parent company, Santander USA Holdings, aka SHUSA. SHUSA held 60% of the shares of SCUSA, and its practices were regulated by the Dodd–Frank Wall Street Reform and Consumer Protection Act, which in turn bound SCUSA's practices to its major shareholder's regulations. SHUSA? Well, their parent company is the Spanish bank Banco Santander. It really is Santanders of various forms all the way down.
Confused? According to the plainitff attorneys, so were SCUSA's leaders. In the documents that SCUSA presented to investors before its IPO, the company made no mention of how SHUSA’s regulation would pertain to SCUSA. In fact, plaintiff’s claim, “SCUSA was not even aware of the Federal Reserve's expectations for compliance.” Emphasis in the original complaint.
By March of 2014, SHUSA, SCUSA’s 60% owner, failed its Dodd-Frank mandated stress. The plaintiff’s complaint states that “As the truth was gradually revealed, SCUSA's stock price dropped substantially, on enormous volumes on the NYSE, from the $24 IPO price to as low as $18.99 during the relevant time period.”
If you traded SCUSA common stock during the relevant period, please let us know. Or, if you are just confused about all these different Santanders and want to talk this out, then give us a call. We’d be happy to sort all this out.
Willis Towers Watson
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Chicago Clearing Corporation (CCC) cordially invites you to a webinar on international securities and antitrust litigations. On Monday, December 14, at 10:00 AM Central, CCC’s President and General Counsel Brian Blockovich will moderate a presentation by Guus Warringa, Director of Institutional Investor Relations at the law firm Grant & Eisenhofer, ... Read More
Morgan Stanley Fair Fund
Santander Consumer USA Holdings
“I could go on and on, but bottom line, the fees being charged are much less than what I was spending in house to file and this is just one less thing I have to spend time trying to figure out how to complete on a consistent basis. Dealing with the CCC staff has been a very positive thing.”
“We were spending countless hours on class action claims before we signed on with CCC in January. Matt Murray and their technical team ensured our data transmission was seamless and secure. We found everyone at CCC to be professional, courteous, and accommodating.”
“Signing with CCC has made a huge difference. Before, it was horrible. We had to print thousands of pieces of paper, invite clients to come in and sit down with us to show them where to find the transactions, how to input them into the Proof of Claim forms. Now it's simple. It’s very nice to be able to tell our client, “You can shred that Proof of Claim form because CCC has it taken care of.”
Registered Investment Advisor
“Your client reporting portal and customer service is the reason we chose Chicago Clearing. I send the data on an annual basis to CCC and they take it from there. My clients are protected (if there is a class action, it is getting filed), the Bank is protected (we are meeting our fiduciary obligation by filing the claims)."