Discover Board Sued for Misleading on Risk, Compliance Controls

Discover Financial Services’ directors allegedly misled investors about the company’s internal risk and compliance controls for its consumer credit and private student loan divisions, concealing issues in both areas of the business that prompted stock drops when revealed, a shareholder derivative suit says.

The derivative suit, which follows a class action filed against the company earlier this month, alleges that Discover’s board misrepresented compliance failings, while facilitating the repurchase of more than 58 million shares for $6.4 billion. It was filed Tuesday in US District Court for the Northern District of Illinois.

The misrepresentations occurred from Feb. 21, 2019 until ...