Higher One in Hot Water Again
HARTFORD (CN) - Higher One, a Connecticut-based firm that partners with universities and colleges to provide financial aid through debit cards, is in hot water again.
Higher One this year agreed to pay $15 million to settle a 2012 lawsuit claiming it improperly charged fees and made misleading statements about account costs and fees.
A class action filed Tuesday in Federal Court claims that though Higher One claimed it had complied with the 2012 settlement, "the company continued its improper marketing and disclosure practices during the class period."
"These practices ultimately placed the company at risk of further sanctions," the complaint states.
When word came that Higher One could face more sanctions, its share price fell by $0.90 - more than 14 percent - to close at $5.51 on May 13, 2014," the complaint states.
"As a result of defendants' wrongful acts and omissions, and the precipitous decline in the market value of the company's securities, plaintiff and other class members have suffered significant losses and damages," lead plaintiff Brian Perez says in the complaint.
Higher One denies the allegations.
"We believe that the allegations in the complaint are meritless and we intend to vigorously defend ourselves," Higher One spokesman Shoba V. Lemoine said in an email Wednesday.
But the lawsuit, which also names as defendants company officers Mark Volchek, Christopher Wolf and Jeffrey Wallace, claims that the "defendants were personally motivated to make false statements and omit material information necessary to make the statements not misleading in order to personally benefit from the sale of Higher One securities from their personal portfolios."
"As a result of the dissemination of the aforementioned false and misleading reports, releases and public statements, the market price of Higher One securities was artificially inflated throughout the class period," the complaint states.
The class period is Aug. 7, 2012 to May 12, 2014.
Perez seeks class certification, damages for securities violations, prejudgment and post-judgment interest, attorneys' fees, expert fees and other costs.
He is represented by Henry Elstein, with Goldman, Gruder, and Woods, of Trumbull, Conn.