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Reuters: Court Approves CIT Group $75 Million Accord in Fraud Case

March 26, 2012, 07:00 AM
Filed Under: Industry News
Related: CIT Group, Fraud

Reuters reported that CIT Group won preliminary court approval on Friday of a $75 million settlement to resolve allegations the commercial lender fraudulently misled shareholders about its exposures to risky mortgages and student loans.

Shareholders claimed the New York-based company falsely assured that it maintained conservative loan portfolios and had set aside adequate reserves for expected losses. They said CIT's share price tumbled as the truth became known and losses grew.

According to the report, U.S. District Judge Barbara Jones in Manhattan granted preliminary approval for the settlement. A hearing to consider final approval is scheduled for June 13. The lead plaintiff is Pensioenfonds Horeca & Catering, a pension fund for the Dutch hospitality and catering industry.

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