SAN DIEGO — Bernstein Litowitz Berger & Grossmann LLP have
announced a proposed settlement in a securities class action with the
In a securities class action involving Automotive Machinists
Pension Trust against EZCORP Inc., a small-dollar lender, AMPT has
proposed settlement of the action for $5.9 million in cash. If
approved, it will resolve all claims in the class action, a news
release through PR
According to Bernstein
Litowitz Berger & Grossmann LLP, the firm filed the lawsuit
on behalf of the Automotive Machinists Pension Trust against EZCORP
Inc., company officers and EZCORP’s controlling shareholder,
Phillip Ean Cohen, and MS Pawn Limited Partnership.
The complaint alleged
that from April 19, 2012, through Oct. 6, 2014, EZCORP and some of
its senior executives “violated provisions of the Exchange Act by
disseminating false and misleading press releases, financial
statements, filings with the Securities and Exchange Commission and
statements during investor conference calls.”
It also was reported by the law firm that during the period from
2012 to 2014, EZCORP and some of its senior executives misrepresented
significant facts concerning the business, including the fact that
EZCORP and its Cash Genie company were following the correct
regulations governing the businesses.
However, EZCORP disclosed that Cash Genie has not obeyed
best-practice measures, admitting that it had violated
consumer-protection laws. It further added that it was undergoing a
reorganization of its business, stating that it was getting out of
its online businesses in the United Kingdom and the United States.
This resulted in around $110 million in goodwill impairments and
other charges, and EZCORP stocks declining significantly.
On Jan. 26, 2015, AMPT appointed Bernstein Litowitz Berger &
Grossmann as lead counsel, which filed its consolidated complaint on
March 12 of that year. Even though EZCORP filed motions to dismiss,
the lead plaintiff opposed, the law firm reported.
On Nov. 29, 2016, the parties announced a $5.9 million settlement,
which was granted preliminary approval by the court on Jan. 4, 2017.
A hearing will be held
at 10 a.m. April 25, 2017 before Judge Andrew L. Carter Jr. in U.S.
District Court, Southern District of New York. A deadline for
submission of claims is May 19, 2017.
In 2015, the Consumer Financial Protection Bureau also took action
against EZCORP Inc. for illegal debt-collection practices. In a
report from the CFPB,
the bureau ordered EZCORP to refund $7.5 million to 93,000 consumers,
pay $3 million in penalties, and stop collection of remaining payday
and installment-loan debts owed by around 130,000 consumers.
CFPB said that it found that EZCORP had “collected debts from
consumers through unlawful in-person collection visits at their homes
or workplaces, risked exposing consumers’ debts to third parties,
falsely threatened consumers with litigation for non-payment of
debts, and unfairly made multiple electronic-withdrawal attempts from
consumer accounts, causing mounting bank fees.”
According to the CFPB website,
EZCORP, headquartered in Austin, Texas, “provided high-cost,
short-term, unsecured loans, which also included payday and
installment loans in 15 states and more than 500 storefronts.”
However, on July 29, EZCORP announced that it would stop offering
payday, installment and auto-title loans in the U.S. after the Bureau
launched its investigation.
BLB&G has four
offices nationwide, including one in San Diego.