GreenSky Investors Reach $27.5 Million Settlement, Seek Court OK

GreenSky Inc. investors who accuse the fintech firm of misleading them about its 2018 initial public offering asked a federal judge in New York to grant preliminary approval to their $27.5 million settlement.

The deal represents almost 14% of the investors’ “estimated recoverable damages, discounted for certain potential defenses,” the class said in a memo filed in the U.S. District Court for the Southern District of New York in support of its motion for preliminary settlement approval.

“Settlements in this range of recovery (and indeed, well below this range) have routinely received approval,” the investors said. They pointed to other securities class suits describing average recoveries ranging from 3% to 7%.

The settlement class includes everyone who purchased GreenSky Class A common stock pursuant or traceable to the IPO, with some exceptions for those with close ties to the company, according to a stipulation and agreement of settlement filed Monday. Judge Alvin K. Hellerstein certified the investor class in June 2020.

Class counsel Cohen Milstein Sellers & Toll PLLC and Scott&Scott Attorneys at Law LLP plan to ask for no more than 25% of the settlement—$6.875 million—in attorneys’ fees. The firms will also seek an unspecified amount as reimbursement for litigation expenses, according to the Monday memo.

Cravath, Swaine & Moore LLP represents GreenSky, which didn’t admit any wrongdoing as part of the settlement.

The case is In re GreenSky Sec. Litig., S.D.N.Y., No. 1:18-cv-11071, preliminary settlement approval motion filed 5/24/21.