CHICAGO — Fifth Third Bank wants a Cook County judge to dismiss a class action alleging it wrongfully pressured workers to open accounts without customer consent.
In a motion filed Oct. 13, Cincinnati-based Fifth Third asked Judge Celia Gamrath to dismiss a lawsuit filed July 31, calling plaintiff Steven Fox’s allegations an attempt “to copy unadjudicated allegations by one of Fifth Third’s many regulators and — without a scintilla of independent investigation or support — transform them into violations of the federal securities laws.”
In arguing to dismiss Fox’s complaint, Fifth Third pointed to a March 2 filing in which it disclosed being notified the Consumer Financial Protection Bureau would file an enforcement action connected to allegedly unauthorized accounts. It accused Fox of “piggybacking on the CFPB’s allegations” regarding the bank’s August 2018 statement linked to its merger with MB Financial.
Adding “layers on references to a merger that took place years after the events in the CFPB action ended,” Fifth Third said, effectively built “a Frankenstein’s monster of a Securities Act complaint.”
Fox’s class would include all former MB Financial shareholders who got Fifth Third stock in the March 2019 merger, a $4.7 billion deal. He said Fifth Third failed to disclose the CFPB investigation, which ran from 2010 to 2016, and if Fifth Third employees were indeed engaged in the alleged improper conduct, the bank’s revenues wouldn’t be sustainable.
The July suit followed similar Cook County class action filed in late April, though that complaint was dismissed in August after the plaintiffs appeared to stop pursuing their claims, according to Cook County court records.
Yet the bank still faces multiple lawsuits in other courts, including the CFPB action filed March 9. Common allegations include Fifth Third tying performance ratings to lofty sales goals and encouraging strategies that boost corporate earnings and holdings by increasing the number of services and products customers hold and use. That pressure allegedly led employees to open new accounts, credit cards and lines and new online banking services without customer knowledge or authorization.
Fifth Third said Gamrath should dismiss Fox’s complaint because he didn’t conduct an independent investigation to substantiate the CFPB’s claims, asserted securities law didn’t it require to make the disclosures it allegedly suppressed, and that “false and misleading” statements he referenced were immaterial. Fifth Third also challenged Fox’s standing and said his claim for “control person” liability is predicated on claims it already argued were deficient.
The bank detailed the “number of risk disclosures” included in the August 2018 statement, and invoked a statement it made the day the CFPB filed its enforcement action in federal court in Chicago. At the time, Fifth Third said it “identified fewer than 1,100 unauthorized accounts out of more than 10 million opened between 2010 and 2016. This represents just 0.01% of all accounts.”
Fifth Third further said the CFPB didn’t inform it “of a single instance of likely misconduct beyond those” it had already identified and resolved. It also said and of Fox’s “allegations regarding alleged employee misconduct should be stricken because he admits that not a single substantive allegation is within his personal knowledge.”
Even if Gamrath allows Fox to copy CFPB allegations, Fifth Third said, he lacks standing because his claims rely on alleged omissions, not “any actionable misstatement or omission.” Further, his complaint doesn’t establish the bank knew anything at the time of the merger statement that would adversely affect its continuing operations.
Representing Fifth Third in the matter are attorneys from Skadden, Arps, Slate, Meagher & Flom LLP, of Chicago and New York.
Fox is represented by attorney Michael D. Smith, of Chicago, and Labaton Sucharow LLP, of New York.