Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Comerica Incorporated (CMA)
NEW YORK, Aug. 22, 2023 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Central District of California on behalf of all persons or entities who purchased the securities of Comerica Incorporated (“Comerica” or the “Company”) (NYSE: CMA) between February 9, 2021 and May 29, 2023, both dates inclusive (the “Class Period”).Comerica is a financial services company and the issuing bank for the U.S. Department of the Treasury’s Direct Express program, which issues electronic payments (such as Social Security of veterans’ benefits) to individuals who do not have bank accounts. As part of the Direct Express program, Comerica must adhere to Regulation E, which “provides a basic framework that establishes the rights, liabilities, and responsibilities of participants in electronic fund transfer systems such as automated teller machine transfers, telephone bill-payment services, point-of-sale (POS) terminal transfers in stores, and preauthorized transfers from or to a consumer’s account (such as direct deposit and social security payments).”
The Complaint alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) Comerica failed to provide meaningful oversight over the vendors to whom it contracted out day-to-day operations of the Direct Express program, a system through which Comerica is contracted to provide federal benefits on debit cards to millions of Americans without bank accounts; (ii) as a result of violations in the day-to-day operations of Direct Express, including handling fraud disputes and allowing sensitive data to be handled out of a vendor’s office in Pakistan, Comerica was not in compliance with its federal contract, and knew it was not in compliance; and (iii) Comerica knew and failed to disclose that it was in potential violation of Regulation E due to inadequate fraud prevention in the Direct Express program and responses to instances of fraud.
On May 29, 2023, American Banker released an article titled “Comerica in ‘serious violation’ of Treasury’s Direct Express program.” The article discussed significant issues with i2c Inc. and Conduent Inc., two vendors to whom Comerica contracts out the day-to-day operations of Direct Express, including handling cardholder information through an office in Lahore, Pakistan, lack of oversight, and failures to communicate with beneficiaries. The article further detailed Comerica’s alleged violations of Regulation E. On this news, the price of Comerica stock declined more than 7% over two trading sessions, damaging investors.
Investors who purchased or otherwise acquired shares of Comerica Incorporated (CMA) should contact the Firm* prior to the October 20, 2023 *lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
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