Discover Financial Services Securities Class Action Litigation
DISCOVER FINANCIAL SERVICES SECURITIES CLASS ACTION LITIGATION, NO. 1:23-CV-06788 (N.D. ILL.)
Lieff Cabraser serves as Co-Lead Counsel and counsel for Co-Lead Plaintiffs the NYC Funds in a securities fraud proposed class action against Discover and associated individual defendants for misrepresenting and failing to disclose that the company employed deficient risk management and compliance procedures and internal controls, which among other things allowed Discover to improperly misclassify credit cards for the purpose of artificially inflating the company’s revenues and other financial results. As plaintiffs allege, Discover’s risk management, compliance, and control failures have subjected the company to consent orders issued by the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve Board, and have led to more than $1.2 billion in fines, penalties, and consumer redress. Potential damages to the proposed investor class are in the billions of dollars. After the court dismissed the first amended complaint in March 2025, plaintiffs moved to amend their allegations based on Discover’s admissions in 2024 regarding the falsity of certain of its previously issued financial results and material weaknesses in its internal control over financial reporting, as well as recent regulatory findings that, among other things, “senior executives” at Discover were aware of the card misclassification practices but did not adequately address them. The court granted leave to amend, and plaintiffs filed the second amended complaint in March 2026. Defendants have moved to dismiss that complaint, and the briefing recently concluded.
