Amanda Antell  |  April 13, 2015

Category: Legal News

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Ally Financial Inc.

One of America’s most well-known bank-holding companies, Ally Financial Inc., is being investigated for security fraud for alleged misconduct regarding the company’s stock exchange. This Ally Financial class action investigation is looking into the possibility that Ally Financial executed questionable business actions in selling their company stock. This securities fraud investigation is open to all shareholders who purchased Ally Financial stock from April 2014 to present. Any success in this investigation could allow shareholders to recover losses incurred from the company’s alleged investment fraud.

Ally Financial Inc., previously known as GMAC Inc. (General Motors Acceptance Corporation), is a large bank-holding company that is located in Detroit, Mich. With over 15 million customers worldwide, it provides a variety of finance services including: auto financing, corporate financing, insurance, mortgage services, and online banking. Ally has served as a great source of employment in its residence, providing 18,900 people jobs, and had provided financing to 75 percent of the 6,450 General Motors dealers in 2008. However, the company has a fairly checkered past as it had to be bailed out by the U.S. government during the economic recession of 2007, taking ownership from the company from General Motors.

On Dec. 24, 2008, the Federal Reserve allowed the company to reform itself into a bank-holding company, and became profitable once more in 2010. After achieving financial stability, Ally Financial entered the stock market in 2011 offering public stock options, and launched their IPO in the spring of 2014. The U.S. Government sold its remaining shares of the company in December 2014. However, this is where the trouble began to brew, as legal experts began investigating into how the stocks were presented and later sold to shareholders.

While the company is no stranger to securities fraud allegations, it could still mean trouble for the national bank-holding company. In 2011, Ally Financial was one of 18 banks sued by the Federal Deposit Insurance Corporation (FDIC), and the Federal Housing Finance Agency (FHFA). Ally and the other companies were accused of selling insufficient mortgage securities to Freddie Mac and Fannie Mae, which led to the companies’ financial crisis. Additionally, Ally was also one of several banks that the FDIC sued for allegedly selling defective mortgage-fueled securities to other banks, which ultimately failed and nearly consumed the agency. Ally Financial settled both cases in 2013, agreeing to the settle the FDIC lawsuit for $55.3 million, and $475 million for the FHFA.

Overview of Securities Fraud Allegations

Any potential shareholders looking to joining this Ally Financial security fraud class action investigation should understand the nature of these allegations. To begin, this securities class action lawsuit investigation is centered around investors who had either purchased or sold a company’s securities and had suffered similar economic damage caused by the securities fraud allegations. Potential Ally Financial financial fraud Class Members would have purchased stock during between April 2014 and present date, called the Class period. A Class period normally starts when a company admits to violating securities laws and ends when the truth is fully explained to shareholders.

Secondly, legal experts advise any potential members to have a solid understanding of what securities and how they work. Securities are financial tools that represent the financial value of something like stocks, bonds, and notes. They typically come in the form of an ownership certificate, which grants the profit distribution rights to the shareholders. Securities are normally exchanged through security markets rather than trading markets, because the securities could become subject to unethical business practices, like insider trading or securities fraud. Due to this risk, the securities market is heavily monitored by federal and state laws, which are designed to protect investors and shareholders.

It is important to be aware of securities violations or securities fraud, which occurs when a firm uses fraud or any other kind of misrepresentation in presenting the security of their stock. The penalties for violating securities policy can be severe, with even minor misdemeanor charges resulting in heavy fines or jail time.

Join a Free Ally Class Action Lawsuit Investigation Into Securities Fraud

Securities fraud lawyers are actively looking for investors who purchased Ally stock between April 2014 and the present and suffered financial losses. See if you qualify to join this FREE class action lawsuit investigation by clicking “Join Now” below.

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