Sallie Mae 2007 Annual Report Download - page 34
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On January 31, 2008, a putative securities class action lawsuit was filed against the Company and three
senior officers in federal court in the Southern District of New York (Burch v. SLM Corporation, Albert L.
Lord, C.E. Andrews, and Robert S. Autor). The case has been assigned to the Honorable William H. Pauley, III.
The case purports to be brought on behalf of all persons who purchased or otherwise acquired the Common
stock of the Company between January 18, 2007 and January 3, 2008. The complaint alleges that the Company
and the named officers violated federal securities laws by issuing a series of materially false and misleading
statements to the market throughout the Class Period, which statements allegedly had the effect of artificially
inflating the market price of the Company’s securities. The complaint alleges that defendants caused the
Company’s results for year-end 2006 and for the first three quarters of 2007 to be materially misstated because
the Company failed to adequately accrue its loan loss provisions, which overstated the Company’s net income,
and that the Company failed to adequately disclose allegedly known trends and uncertainties with respect to its
non-traditional loan portfolio. The complaint alleges violations of the Securities Exchange Act of 1934 § 10(b)
and § 20(a) and Rule 10b-5. The Company was served on February 5, 2008 and the case is pending. A class
has not yet been certified in the above action. The Company is aware of press reports that other similar actions
may be filed, but has not been served with any other complaints. We intend to vigorously assert our defenses.
On February 11, 2008, the Company received a subpoena from the Attorney General of the State of New
York that seeks documents and information relating to our direct-to-consumer Tuition Answer product. We
intend to cooperate with the Attorney General’s office.
Item 4. Submission of Matters to a Vote of Security Holders
Nothing to report.
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