UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
SETH MORGULAS, on Behalf of Himself Court File No.
and All Others Similarly Situated,
Plaintiff,
CLASS ACTION COMPLAINT
v. FOR VIOLATION OF THE
FEDERAL SECURITIES LAWS
METRIS COMPANIES, INC.,
RONALD N. ZEBECK and DEMAND FOR JURY TRIAL
DAVID WESSELINK
Defendants.
Plaintiff, through his attorney, brings this action on behalf of himself and all others
situated, and on personal knowledge as to himself and his activities, and on information and belief
all other matters, based on investigation conducted by counsel, hereby alleges as follows:
NATURE OF THE CASE
1. This is a class action on behalf of all purchasers of Metris Companies, Inc.
the "Company") securities between November 5, 2001 and July 17, 2002 inclusive (the "Class
Period"), seeking remedies under the Securities Exchange Act of 1934 (the "Exchange Act").
Defendants are Metris, its Chief Executive Officer and Chairman of the Board Ronald Zebeck and its
Vice Chairman David Wesselink.
2. Metris is in the business of providing financial products and services, including
cards. The Company issues credit cards through is wholly owned subsidiary, Direct Merchants Credit
Card Bank, N.A. ("Direct Merchants" or the "Bank"), the tenth largest bankcard issuer in the United
States. Metris is a subprime lender focusing on lower to middle income consumers.
3. The Office of the Comptroller of the Currency (the "OCC") is responsible for the
regulation and supervision of all national banks and is the primary federal regulator of Metris'
SNIPPETS:
This is a class action on behalf of all purchasers of Metris Companies,
seeking remedies under the Securities Exchange Act of 1934.
Defendants are Metris, its Chief Executive Officer and Chairman of the Board Ronald Zebeck
Vice Chairman David Wesselink.
Metris is in the business of providing financial products and services,
The Company issues credit cards through is wholly owned subsidiary, Direct Merchants Credit
Card Bank, N.A., the tenth largest bankcard issuer in the United
As part of their regulatory and supervisory functions, OCC
operations which includes analyzing a bank's loan and investment portfolios, funds
earnings, liquidity, sensitivity to market risk, and compliance with consumer banking laws.
examiners review the bank's internal controls, internal and external audit, and compliance
Merchants to restructure significant parts of its operations including its credit policies,
assessment, debt forbearance, allowance for loan and lease losses and internal controls.
Merchants Credit Card Bank, N.A., the tenth largest bankcard issuer in the United States.
Company's Vice Chairman of the Board.
materially misleading or untrue, and to disclose any trends that would materially affect
Interagency Guidance on Subprime Lending previously issued in 1999 ("1999 Guidelines").
certain insured depository institutions and their subsidiaries.
Subprime loans are loans to borrowers displaying one or more of these characteristics at the
classification of risk, and documentation for re-aging, renewing, or extending delinquent
The findings ultimately resulted in a consent agreement ("Consent Order") entered
standards an event which would invariable effect Metris' financials.
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