What's Happening?
Robbins Geller Rudman & Dowd LLP has announced a class action lawsuit against SLM Corporation, also known as Sallie Mae, for alleged violations of the Securities Exchange Act of 1934. The lawsuit, filed in the District of New Jersey, claims that SLM and certain executives made false or misleading statements regarding the company's private education loans (PELs) during the period from July 25, 2025, to August 14, 2025. The allegations include a significant increase in early-stage delinquencies that were not disclosed, and an overstatement of the effectiveness of SLM's loss mitigation and loan modification programs. A report by TD Cowen highlighted a 49 basis point increase in delinquencies in July 2025, contradicting SLM's CFO Peter M. Graham's
assurances of normal seasonal trends. Following this report, SLM's stock price fell by approximately 8%. Investors have until February 17, 2026, to seek appointment as lead plaintiff in the lawsuit.
Why It's Important?
This lawsuit is significant as it highlights potential mismanagement and lack of transparency within SLM Corporation, which could have broader implications for investors and the financial market. If the allegations are proven, it could lead to substantial financial penalties for SLM and impact its reputation and stock value. The case underscores the importance of accurate financial reporting and transparency in maintaining investor trust. For investors, the outcome of this lawsuit could affect their financial interests, especially those who suffered losses during the specified period. The case also serves as a reminder of the legal responsibilities companies have under the Securities Exchange Act to provide truthful and complete information to their shareholders.
What's Next?
Investors interested in leading the class action have until February 17, 2026, to file for lead plaintiff status. The lead plaintiff will represent the class in directing the lawsuit and can choose the law firm to litigate the case. The outcome of this lawsuit could lead to changes in SLM's management practices and policies, particularly in how they report financial data and manage loan delinquencies. The financial and legal communities will be closely watching the developments of this case, as it may set precedents for future securities litigation.
