Investor Files Suit Against Sallie Mae

Investor Robert Burch filed a class action suit against Sallie Mae on Thursday, accusing the company of misleading investors about the company’s subprime mortgage exposure.

Burch claims that Sallie Mae did not take proper precautions in its loan loss reserves for the subprime loans. He also goes further accusing that the company and some of the executives made false and misleading statements regarding their financial results and violating accounting rules.

The suit states that ” The Company had far greater exposure to anticipated losses and defaults related to its non-traditional loan portfolio than it had previously disclosed.”  The executive defendants named in the case were Chief Executive and Chairman Albert Lord, Chief Financial Officer Charles Andrews, and Executive Vice President of Operations Robert Autor.

To read more about Investor files subprime suits against Sallie Mae head on over to Reuters.