Settlement Alert: In re DFC Global Corp. Securities Litigation

4/14/2017 - Lead Plaintiffs, the Arkansas Teacher Retirement System, Macomb County Employees Retirement System, and Laborers’ District Council and Contractors’ Pension Fund of Ohio, on behalf of themselves and the Class, have reached a proposed settlement of In re DFC Global Corp. Securities Litigation, for $30,000,000 in cash.  If approved, the settlement will resolve all claims in the action.  On March 8, 2017, the Court granted preliminary approval of the proposed settlement, and directed that the Notice and Proof of Claim forms be made available to all potential Class Members. 

If you are a member of the class, your rights will be affected and you may be eligible for a payment from the settlement, unless you timely request to be excluded.  The class consists of:

all persons and entities who purchased or otherwise acquired DFC Global Corp. common stock during the period from January 28, 2011 through February 3, 2014, inclusive (the “Class Period”), and were damaged thereby, except for certain persons and entities who are excluded from the Class by definition (see paragraph 27 of the Notice) or who request exclusion pursuant to the instructions set forth in the Notice.

Please read the Notice to fully understand your rights and options.  The Notice is available here and the Proof of Claim form is available here.  You may also visit the Settlement website established by A.B. Data, the claims administrator for the action, at, for more information about the Settlement.

Payments to eligible claimants will be made only if the Court approves the Settlement and a plan of allocation, and only after any appeals are resolved, and after the completion of all claims processing.  Please be patient, as this process will take some time to complete.


Claim Filing Deadline:  Claim Forms must be postmarked no later than September 4, 2017 to be eligible for a payment from the Settlement.

Exclusion Deadline:  To exclude yourself from the Class, you must submit a written request for exclusion so that it is received no later than June 16, 2017, in accordance with the instructions in the Notice.

Objection Deadline:  Any objections to the proposed Settlement, the proposed Plan of Allocation, and/or the request for attorneys’ fees and reimbursement of expenses, must be received no later than June 16, 2017, in accordance with the instructions in the Notice.

The Settlement Hearing: The Settlement Hearing will be held on September 19, 2017 at 9:30 a.m., before the Honorable Berle M. Schiller at the United States District Court for the Eastern District of Pennsylvania, James A. Byrne U.S. Courthouse, 601 Market Street, Philadelphia, PA 19106, to determine, among other things, whether the proposed Settlement is fair, reasonable and adequate and should be approved; whether the proposed Plan of Allocation is fair and reasonable and should be approved; and whether Lead Counsel’s motion for an award of attorneys’ fees and reimbursement of expenses should be approved.

Background of the LItigation

Following the Lead Plaintiffs’ appointment by the Court to lead the prosecution of this securities class action, Lead Plaintiffs filed a Consolidated Class Action Complaint on July 21, 2014.  The complaint alleged that DFC Global Corp., a payday lender with core operations in the United Kingdom, and members of its senior management team, made false and misleading statements about the company’s lending practices, claiming that those practices were “conservative” or “responsible.”  The complaint alleged that DFC Global habitually extended loans to individuals who could not repay them and repeatedly rolled over loans to borrowers for a fee in order to avoid reporting defaults without any additional credit assessment.  The complaint also alleged that, contrary to public statements that DFC Global “very effectively” managed the credit risk in its payday loan portfolio through its “superior credit analytics” and “daily monitoring” of loan payments, in reality, and as confirmed by various former employees of the Company, DFC Global did not perform any meaningful credit or affordability assessments before originating its payday loans as U.K. regulations required, and did not effectively employ credit analytics to manage the Company’s credit risk. 

On June 16, 2015, the Court held that the allegations of the complaint satisfied the heightened pleading standards of the federal securities laws and of the Private Securities Law Reform Act of 1995, finding that the complaint sufficiently alleged that defendants concealed from the investing public the company’s true financial and operational condition and its irresponsible high-risk lending practices.  In analyzing the Lead Plaintiffs’ claims, the Court held that the factual allegations in the consolidated complaint “tell a tale of a far-reaching and egregious abdication of lending responsibility,” and noted the “predatory nature of the alleged conduct explicitly set forth in the allegations.”

On August 4, 2016, the Court granted the motion filed by Lead Plaintiffs for certification of the Class alleged in the complaint.  Lead Plaintiffs had moved to certify the Class in October 2015.  In granting the motion, the Court found: “There are no conflicts that would render Lead Plaintiffs unable to protect the interests of the class.  There is also nothing in the record that would lead this Court to conclude that counsel is unable to adequately represent the class.”  In the opinion, the Court also analyzed the work performed by experts for both sides.  He reviewed the work done by Lead Plaintiffs’ expert to support the proposition that DFC Global’s stock traded in an efficient market during the class period – a key element to maintain a securities class action – and the work that the defendants’ expert did in seeking to undercut that conclusion. The Court concluded that the Lead Plaintiffs “have the better of this battle of the experts.”  Specifically, the Court found that defendants’ expert had not challenged the underlying market-related facts highlighted by the Lead Plaintiffs’ expert, and that Lead Plaintiffs’ expert had shown that DFC Global’s stock reacted significantly on the dates when DFC allegedly disclosed the truth about its business operations.  Based on these and other findings, the Court granted the class certification motion in its entirety.

The Court’s rulings on the Defendants’ motions to dismiss the Complaint and the Lead Plaintiffs’ class certification motion allowed the Lead Plaintiffs to move forward with the prosecution of this case as a class action on behalf of all investors (excluding defendants and their affiliates) who purchased DFC Global common stock during the class period from January 28, 2011 through February 3, 2014, inclusive.  Discovery in the case commenced in July 2015.  Defendants and certain non-parties produced more than 1.7 million pages of documents that Lead Plaintiffs’ counsel reviewed and analyzed, and the Lead Plaintiffs produced thousands of pages of documents to Defendants.  Thirteen depositions were taken in the case, including six depositions of Lead Plaintiffs’ representatives and financial advisors; two depositions of expert witnesses taken in connection with the motion for class certification; and five depositions of current and former employees of DFC Global as fact witnesses.  As more fully described in the Notice, the parties engaged in mediation sessions and conference calls before an experienced mediator, which concluded with the parties’ acceptance of a mediator’s proposal that the claims of the Lead Plaintiffs and the Class be settled in exchange for a $30 million payment to be made by or on behalf of the Defendants.  The settlement payment has been made and is invested in an interest-earning escrow account for the benefit of the Class.

On March 1, 2017, the parties entered into a Stipulation and Agreement of Settlement, which was presented to the Court in a motion for preliminary approval of the settlement. On March 8, 2017, the Court issued an Order Preliminarily Approving Settlement and Providing for Notice, thereby allowing the Notice and Claim Form to be issued and made available to all potential Class Members.