Sallie Mae 2012 Annual Report Download - page 28

Item 3. Legal Proceedings
Investor Litigation
In Re SLM Corporation ERISA Litigation. On May 8, 2008, a class action complaint was filed in U.S.
District Court for the Southern District of New York against the Company, certain current and former officers,
retirement plan fiduciaries, and the Board of Directors of the Company, formerly in the U.S. District Court for
the Southern District of New York. The complaint alleged breaches of fiduciary duties and prohibited
transactions in violation of the Employee Retirement Income Security Act arising out of alleged false and
misleading public statements regarding our business made during the 401(K) Class Period and investments in our
common stock by plan participants in the 401(K) Plans. The class consists of participants in or beneficiaries of
the Sallie Mae 401(K) Retirement Savings Plan and Sallie Mae 401(k) Savings Plan (together, the “401K Plans”)
between January 18, 2007 and “the present” whose accounts included investments in our common stock (“401K
Class Period”). On September 24, 2010, the District Court dismissed the complaint. The Plaintiffs appealed to the
U.S. Court of Appeals for the Second Circuit; however, on December 26, 2012, the Second Circuit affirmed the
District Court’s dismissal of the complaint.
Lending and Collection Litigation and Investigations
Mark A. Arthur et al. v. Sallie Mae, Inc. On February 2, 2010, a class action lawsuit was filed by a borrower
in U.S. District Court for the Western District of Washington alleging that we contacted consumers on their
cellular telephones via autodialer without their consent in violation of the Telephone Consumer Protection Act,
47 U.S.C. § 227 et seq. (“TCPA”). On October 7, 2011, we entered into an amended settlement agreement under
which the Company agreed to a settlement fund of $24.15 million. On December 5, 2012, the U.S. Court of
Appeals for the Ninth Circuit dismissed an appeal filed by two individual objectors. We have denied vigorously
all claims asserted against us, but agreed to settle to avoid the burden, expense, risk and uncertainty of continued
litigation.
We and our subsidiaries and affiliates also are subject to various claims, lawsuits and other actions that arise
in the normal course of business. Most of these matters are claims by borrowers disputing the manner in which
their loans have been processed or the accuracy of our reports to credit bureaus. In addition, our collections
subsidiaries are routinely named in individual plaintiff or class action lawsuits in which the plaintiffs allege that
those subsidiaries have violated a federal or state law in the process of collecting their accounts. We believe that
these claims, lawsuits and other actions will not have a material adverse effect on our business, financial
condition or results of operations. Finally, from time to time, we and our subsidiaries and affiliates receive
information and document requests from state attorneys general, legislative committees and administrative
agencies concerning certain business practices. Our practice has been and continues to be to cooperate with these
bodies and to be responsive to any such requests.
Item 4. Mine Safety Disclosures
N/A
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