Judge clears banks in decade-old merger proxy suit

TL;DR

A Delaware federal judge granted summary judgment to M&T Bank Corp., Hudson City Bancorp Inc., and their directors in a shareholder class action over their merger proxy statement.
The court ruled that the joint proxy statement contained no material misstatements or omissions about regulatory risks that delayed the $3.7 billion merger from 2013 to 2015.
The decade-long case ends with defendants prevailing, as plaintiffs failed to show causation, loss, or reliance on any alleged proxy flaws.

The story at a glance

A U.S. District Judge in Delaware, Evan J. Wallach sitting by designation, dismissed the remaining claims in Jaroslawicz v. M&T Bank Corp. by granting summary judgment to the banks and directors. Lead plaintiff David Jaroslawicz and class members (including the Belina family) alleged violations of Section 14(a) of the Securities Exchange Act due to misleading proxy disclosures on M&T's BSA/AML compliance issues that delayed Federal Reserve approval. The ruling came after oral argument on March 13, 2026, in a case filed in 2015 following the merger's close. The merger, announced in 2012, was approved by Hudson City shareholders in April 2013 but took over two years due to regulatory hurdles.[[1]](https://www.mealeys.com/mealeys/articles/2463736)[[2]](https://www.ded.uscourts.gov/sites/ded/files/opinions/15-897_4.pdf)

Key points

Merger terms: Hudson City shareholders received 40% cash and 60% M&T stock; deal valued at $3.7 billion and closed November 1, 2015, after extensions.
Proxy filed February 22, 2013; included risk factors on regulatory approvals per Item 105 of Regulation S-K, but plaintiffs claimed omissions on M&T's known BSA/AML and consumer compliance weaknesses.
Delays stemmed from Federal Reserve concerns over M&T's Bank Secrecy Act/anti-money laundering program; M&T settled with CFPB for $2 million in 2014.
Court found no genuine dispute on materiality: disclosures were limited by bank examination privilege barring sharing of supervisory info; no evidence of economic loss or proximate causation from proxy.
Plaintiffs' experts (Keath/DeRosa) failed to link stock price drops to undisclosed info, as market absorbed public supplemental disclosures quickly.
Earlier procedural history: Third Circuit revived claims in 2020; class certification denied in 2024; summary judgment motion filed by defendants (represented by Simpson Thacher & Bartlett).[[3]](https://www.stblaw.com/about-us/news/view/2026/04/08/simpson-thacher-wins-summary-judgment-in-decade-long-dispute-for-m-t-bank)[[2]](https://www.ded.uscourts.gov/sites/ded/files/opinions/15-897_4.pdf)

Details and context

The case arose from post-financial crisis pressures on Hudson City, leading to the 2012 merger talks with M&T. Federal Reserve approval was needed, but M&T's compliance issues—flagged in exams—held it up until remedial actions and a settlement cleared the path in September 2015.

Plaintiffs argued the proxy overstated compliance and understated risks, but the court noted general warnings sufficed and specifics were privileged. Stock prices reacted to public news of delays, undercutting loss claims in an efficient market.

This ruling aligns with limits on hindsight liability in proxy suits; shareholders ultimately profited nearly $2 billion from the deal despite delays.[[4]](https://www.mealeys.com/mealeys/mealeys-class-actions)[[2]](https://www.ded.uscourts.gov/sites/ded/files/opinions/15-897_4.pdf)

Key quotes

None directly quoted in accessible sources.

Why it matters

Proxy statements in mergers face high scrutiny for regulatory risks, but courts protect banks from disclosing confidential exam details. Investors alleging omission-based claims must prove actual reliance, loss, and causation beyond stock dips—setting a high bar after years of litigation. Watch for any Third Circuit appeal, though summary judgment dismissal leaves little ground unless new evidence emerges.