SOURCE: Kaplan Fox & Kilsheimer LLP

August 15, 2008 17:07 ET

Kaplan Fox Seeks to Recover Losses for Investors Who Purchased CIT Group Inc.'s CIT-Z Preferred Stock

NEW YORK, NY--(Marketwire - August 15, 2008) - Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has filed a class action suit in the United States District Court for the Southern District of New York against CIT Group Inc. ("CIT" or the "Company") (NYSE: CIT) and certain of its executives and directors that alleges violations of the Securities Act of 1933 on behalf of a class (the "Class") consisting of all persons or entities who purchased CIT-Z preferred stock ("CIT-Z") (NYSE: CITPRZ) pursuant and/or traceable to the Company's registration statement and prospectus filed pursuant to Rule 424(b)(3) with the United States Securities and Exchange Commission on October 17, 2007 (collectively, the "Prospectus") through March 5, 2008.

The Complaint alleges that on October 17, 2007, CIT issued 24,000,000 CIT-Z preferred shares at $25 per unit pursuant to the Prospectus and that the Prospectus was materially false and misleading because it failed to disclose the following: (a) CIT, through its subsidiary Student Loan Xpress ("SLX"), served as the preferred student loan lender of Silver State Helicopter and Silver State was SLX's largest private student loan customer; (b) approximately $196 million of CIT's $364.6 million private student loan portfolio (as of June 30, 2007) was comprised of student loans given to students of Silver State; (c) SLX had materially defective underwriting guidelines and approved virtually all the student loan applications submitted, often requiring little or no evidence of the borrowers' ability to pay the loan and approved loans without requiring documentation; (d) that given the alleged material adverse conditions, Silver State students were unlikely to graduate, which materially increased the likelihood that students would not repay their loans; and (e) given the conditions set forth above, Silver State should have begun writing off its Silver State student loans beginning in the quarter ended June 30, 2007 and failure to do so materially overstated CIT's income in violation of generally accepted accounting principles.

It is further alleged that on March 6, 2008, an analyst issued a report stating that CIT would have to write-off the entire Silver State student loan portfolio. On this news, the price of CIT-Z preferred stock declined $3.30 per share from a closing price on March 5, 2008 of $16.30 per share to close at $13.00 per share, a decline of approximately 20%.

If you are a member of the proposed Class, you may move the court no later than September 23, 2008 to serve as a lead plaintiff for the Class. You need not seek to become a lead plaintiff in order to share in any possible recovery.

Plaintiffs seek to recover damages on behalf of the Class and are represented by Kaplan Fox & Kilsheimer LLP. Our firm, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions and actions involving financial fraud. For more information about Kaplan Fox & Kilsheimer LLP, or to review a copy of the complaint filed in this action, you may visit our website at www.kaplanfox.com.

If you have any questions about this Notice, the action, your rights, or your interests, please e-mail us at mail@kaplanfox.com or contact:

Contact Information

  • Robert N. Kaplan
    Jeffrey P. Campisi
    KAPLAN FOX & KILSHEIMER LLP
    850 Third Avenue, 14th Floor
    New York, New York 10022
    (800) 290-1952
    (212) 687-1980
    Fax: (212) 687-7714
    E-mail address: mail@kaplanfox.com

    Laurence D. King
    KAPLAN FOX & KILSHEIMER LLP
    350 Sansome Street, Suite 400
    San Francisco, California 94104
    (415) 772-4700
    Fax: (415) 772-4707
    E-mail address: mail@kaplanfox.com