HARTFORD, Conn., Jan. 31, 2008 (PRIME NEWSWIRE) -- The law firm of Schatz Nobel Izard P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of all persons who purchased the common stock of SLM Corporation ("Sallie Mae" or the "Company") (NYSE:SLM) between January 18, 2007 and January 3, 2008, inclusive (the "Class Period"). Also included are those who purchased in the Secondary Offering on December 27, 2007.
The Complaint alleges that Sallie May and certain of its officers and directors violated federal securities laws by issuing a series of materially false and misleading statements. Specifically, defendants concealed the following: (i) the Company failed to engage in proper due diligence in originating student loans to subprime borrowers, particularly those attending non-traditional institutions; (ii) the Company was not adequately reserving for uncollectible loans in its non-traditional portfolio; (iii) the Company had far greater exposure to anticipated losses and defaults related to its non-traditional loan portfolio than previously disclosed; and (iv) given the deterioration of the subprime market and reductions in federal subsidies, the Company would be forced to tighten lending standards on both federal loans and private education loans which would have a direct material negative impact on its loan originations going forward.
On January 3, 2008, the Company disclosed that it would be cutting back on its core business of lending to students by being "more selective" in making students loans due to turmoil in the credit markets and a new federal law that slashed subsidies to the private companies that make government-backed student loans. On this news, Sallie Mae's stock dropped $2.49 per share to close at $16.67 per share. Sallie Mae traded as high as $57.98 per share in July 2007.
If you are a member of the class, you may, no later than March 31, 2008, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
While Schatz Nobel Izard P.C. has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, class action cases in general, and your rights, please contact Schatz Nobel Izard P.C. toll-free at (800) 797-5499, or by e-mail at firm@snilaw.com, or visit our website: www.snilaw.com.