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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISIONPLAINTIFF, Individually and onBehalf of All Others Similarly Situated,

Plaintiff,

vs.

CONN’S, INC., THEODORE M. WRIGHT,BRIAN E. TAYLOR, and MICHAEL J.POPPE,

Defendants.

Civil Action No.

CLASS ACTION

JURY TRIAL DEMANDED

COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS

Plaintiff, individually and on behalf of all other persons similarly situated, by Plaintiff’s

undersigned attorneys, alleges the following based upon personal knowledge as to Plaintiff and

Plaintiff’s own acts, and information and belief as to all other matters, based upon, inter alia, the

investigation conducted by and through Plaintiff’s attorneys, which included, among other

things, a review of Defendants’ public documents, conference calls and announcements made by

Defendants, United States Securities and Exchange Commission (“SEC”) filings, wire and press

releases published by and regarding Conn’s, Inc. (“Conn’s” or the “Company”), analysts’ reports

and advisories about the Company, and information readily obtainable on the Internet. Plaintiff

believes that substantial evidentiary support will exist for the allegations set forth herein after a

reasonable opportunity for discovery.

INTRODUCTION

1. This is a securities class action on behalf of all persons who purchased or

otherwise acquired the common stock of Conn’s between September 2, 2014 and December 9,

2014, inclusive (the “Class Period”). Plaintiff seeks to pursue remedies against Conn’s and

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certain of its most senior executives for violations of §§10(b) and 20(a) of the Securities and

Exchange Act of 1934 (“Exchange Act”), and Rule 10b-5 promulgated thereunder.

2. Defendants (as defined below) are liable for: (a) making false statements; or (b)

failing to disclose adverse facts known to them about Conn’s. Defendants’ fraudulent scheme

and course of business that operated as a fraud or deceit on purchasers of Conn’s common stock

was a success, as it: (a) deceived the investing public regarding Conn’s prospects and business;

(b) artificially inflated the price of Conn’s common stock; and (c) caused Plaintiff and other

members of the Class, as defined below, to purchase Conn’s common stock at inflated prices and

suffer economic loss when the revelations set forth herein reached the market.

JURISDICTION AND VENUE

3. Jurisdiction is conferred by §27 of the Exchange Act, 15 U.S.C. §78aa. The

claims asserted herein arise under §§10(b) and 20(a) of the Exchange Act, 15 U.S.C. §§78j(b)

and 78t(a), and SEC Rule 10b-5, 17 C.F.R. §240.10b-5. This Court has jurisdiction over the

subject matter of this action pursuant to 28 U.S.C. §§1331 and 1337, and §27 of the Exchange

Act.

4. Venue is proper in this District pursuant to §27 of the Exchange Act and 28

U.S.C. §1391(b) as the Company is headquartered in this District and the violations of law

complained of herein occurred in part in this District, including the dissemination of materially

false and misleading statements complained of herein into this District.

5. In connection with the acts alleged in this Complaint, defendants, directly or

indirectly, used the means and instrumentalities of interstate commerce, including, but not

limited to, the mails, interstate telephone communications, and the facilities of the national

securities markets.

PARTIES

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6. Plaintiff, as set forth in the accompanying certification, which is incorporated by

reference herein, purchased Conn’s common stock during the Class Period and, as set forth

herein, was damaged thereby when true facts regarding Conn’s were revealed.

7. Conn’s has its principal executive offices at 4055 Technology Forest Blvd., Suite

210, The Woodlands, Texas 77381. The Company is a specialty retailer that offers consumer

goods and related services, in addition to a proprietary credit solution for its consumers. The

Company has approximately 68 stores in several states and conducts its business online as well.

8. Defendant Theodore M. Wright (“Wright”) has been Conn’s Chief Executive

Officer (“CEO”) and President since December 5, 2011. Wright was elected Chairman of the

Company’s Board of Directors effective December 7, 2010, and has served as a director since

2003, when the Company went public.

9. Defendant Brian E. Taylor (“Taylor”) became the Company’s Vice President and

Chief Financial Officer (“CFO”) on April 23, 2012 and abruptly resigned effective December 9,

2014.

10. Defendant Michael J. Poppe (“Poppe”) became the Company’s Executive Vice

President on June 1, 2010 and has been its Chief Operating Officer since April 23, 2012. Poppe

was the Company’s CFO from February 1, 2008 through April 23, 2012.

11. Defendants Wright, Taylor, and Poppe are collectively referred to as the

“Individual Defendants.” Conn’s and the Individual Defendants are referred to, collectively, as

the “Defendants.”

CLASS ACTION ALLEGATIONS

12. Plaintiff brings this action as a class action pursuant to Rule 23 of the Federal

Rules of Civil Procedure on behalf of all persons who purchased or otherwise acquired Conn’s

common stock during the Class Period (the “Class”). Excluded from the Class are Defendants

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and their families, the officers and directors of the Company, at all relevant times, members of

their immediate families and their legal representatives, heirs, successors, or assigns, and any

entity in which Defendants have or had a controlling interest.

13. The members of the Class are so numerous that joinder of all members is

impracticable. The disposition of their claims in a class action will provide substantial benefits to

the parties and the Court. Throughout the Class Period, Conn’s stock actively traded on the

NASDAQ. While the exact number of Class members is unknown to Plaintiff at this time and

can only be ascertained through appropriate discovery, Plaintiff believes there are at least

thousands of members in the proposed Class. Record owners and other members of the Class

may be identified from records maintained by Conn’s and/or its transfer agent and may be

notified of the pendency of this action by mail, using the form of notice similar to that

customarily used in securities class actions.

14. Plaintiff’s claims are typical of the claims of members of the Class as all members

of the Class are similarly affected by Defendants’ wrongful conduct in violation of federal law

complained of herein.

15. Plaintiff will fairly and adequately protect the interests of the Class and has

retained counsel experienced in class action securities litigation.

16. Common question of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual Class members. Among the questions

of law and fact common to the Class are:

(a) whether Defendants violated the Exchange Act;

(b) whether Defendants omitted and/or misrepresented material facts;

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(c) whether Defendants’ statements omitted material facts necessary to make

the statements made, in light of the circumstances under which they were made, not misleading;

(d) whether Defendants knew or recklessly disregarded that their statements

were false and misleading;

(e) whether the price of Conn’s common stock was artificially inflated; and

(f) the extent of damages sustained by Class members and the appropriate

measure of damages.

17. A class action is superior to other available methods for the fair and efficient

adjudication of this controversy as joinder of all members is impracticable. Furthermore, as the

damages suffered by individual Class members may be relatively small, the expense and burden

of individual litigation make it impossible for members of the Class to individually redress the

wrongs done to them. There will be no difficulty in the management of this action as a class

action.

BACKGROUND

18. Conn’s began as a small plumbing and heating business in 1890 and started

selling home appliances to the retail market in 1937. The Company currently offers appliances,

electronics, furniture and mattresses, in addition to product repair, service, distribution,

financing, insurance, and other related services. As of January 31, 2014, the Company operated

79 retail stores located in five states: Texas, Louisiana, Oklahoma, New Mexico, and Arizona.

19. Conn’s also offers consumer credit to its customers. According to the Company, it

“provide[s] access to multiple financing options to address various customer needs including a

proprietary in-house credit program, a third-party financing program and a third-party rent-to-

own payment program.” For the twelve months ended January 31, 2014, the Company financed

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approximately 77.3% of its retail sales, including down payments, under Conn’s in-house

financing plan. According to the Company:

Our decisions to extend credit to our retail customers are made by our internalcredit underwriting department - separate and distinct from our stores and retailsales personnel. In addition to an auto-approval algorithm, we employ a team ofcredit underwriting personnel to make credit granting decisions using ourproprietary underwriting process and oversee our credit underwriting process. Ourunderwriting process considers one or more of the following elements: creditbureau information income and address verification; current income and debtlevels and a review of the customer’s previous credit history with us. The creditrisk of the particular products being purchased determines the finance term andthe level of the down payment offered to the customer if they choose to make thepurchase.

We have developed a proprietary standardized underwriting model that providescredit decisions, including down payment amounts and credit terms, based oncustomer risk, income level and product risk. We automatically approvedapproximately 67.7% of all credit applications that were used in purchases ofproducts from us during fiscal 2014, and the remaining credit decisions are basedon evaluation of the customer’s creditworthiness by a qualified in-house creditunderwriter or required additional documentation from the applicant. To improvethe speed and consistency of underwriting decisions, we continually review ourauto-approval algorithm. For certain credit applicants that may have past creditproblems or lack credit history, we use stricter underwriting criteria. Theadditional requirements include verification of employment and recent workhistory, reference checks and minimum down payment levels.

* * *

We currently extend credit to our customers under our in-house credit programthrough the use of installment accounts, which are paid over a specified period oftime with set monthly payments. We no longer provide revolving charge accountsunder our in-house credit program because we believe that the structure ofinstallment credit accounts results in better credit performance with our corecustomer. Additionally, we offer a Conn’s-branded revolving charge programthrough a third-party consumer lender. Most of our installment accounts providefor payment over 12 to 32 months, with the average account remainingoutstanding for approximately 16 to 20 months.

SUBSTANTIVE ALLEGATIONS

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20. The Class Period starts on September 2, 2014. On that date, the Company issued a

press release announcing its second quarter fiscal 2015 financial results, revealing portfolio

performance deterioration. The press release states in relevant parts:

Credit Segment First-Quarter Results (on a year-over-year basis unlessotherwise noted)

Credit revenues increased 37.8%, to $64.3 million. The credit revenue growth wasattributable to the increase in the average receivable portfolio balanceoutstanding. The customer portfolio balance equaled $1.18 billion at July 31,2014, rising 39.9%, or $336.2 million from the prior year. The portfolio interestand fee income yield was 18.2% for the second quarter, up 30 basis points fromthe prior year.

Provision for bad debts increased $18.3 million to $39.6 million for the secondquarter, for a 13.9% annualized provision rate, up 330 basis points from theprior year. The increase was driven primarily by a 41.1% increase in theaverage portfolio balance, on a 24.9% increase in loan originations over thesame period in the prior year, and higher than expected delinquency and futurecharge-offs. An increase in the balance of accounts which are accounted for astroubled debt restructurings to $62.1 million, or 5.3% of the total portfoliobalance, was responsible for $3.4 million of the increase in the provision for baddebts. The percentage of the customer portfolio balance greater than 60-daysdelinquent was 8.7% as of July 31, 2014, which compares to 8.0% as of April 30,2014 and 8.2% as of July 31, 2013. As of August 31, 2014, the percentage of thecustomer portfolio balance greater than 60-days delinquent was 9.2%.

* * *

Outlook and Guidance

Conn's updated its fiscal year 2015 earnings guidance to a range of $2.80 to$3.00 per diluted share on an adjusted basis. The company expects to generatediluted earnings per share of between $2.75 and $2.95 for the 12 months endedJanuary 31, 2015, which includes charges of approximately $0.05 per dilutedshare associated with facility closures and lease terminations during the first sixmonths of fiscal 2015. The following assumptions were considered in developingthe full-year guidance:

• General economic conditions impacting our customers or potentialcustomers;

• Same stores sales up 5% to 10%;• New store openings of 18;• Ten store closures;

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• Discontinued sales of lawn equipment;• Retail gross margin between 40.0% and 41.0%;• An increase in the credit portfolio balance;• Credit portfolio interest and fee yield of between 17.5% to 18.0%;• Credit segment provision for bad debts of between 11.0% and 12.0% of

the average portfolio balance outstanding based on the same store salesexpectations presented above and influenced by the level of customerreceivables accounted for as troubled debt restructurings;

• Selling, general and administrative expense of between 28.5% and 29.0%of total revenues;

• Issuance of $250.0 million of 7.25% senior unsecured notes on July 1,2014; and

• Diluted shares outstanding of approximately 37.0 million.

(Emphasis added).

21. On September 2, 2014, the Company filed its quarterly report on Form 10-Q for

the quarter ended July 31, 2014, which confirmed the financial results in the September 2, 2014

press release. The 10-Q was signed by Taylor and contained required SOX certifications signed

by Wright and Taylor.

22. On September 2, 2014, the Company hosted a conference call to discuss its

second quarter fiscal 2015 results. During the call, Wright stated, in part:

Overall results were not satisfactory. Our credit operations ran into unexpectedheadwinds resulting in portfolio performance deterioration. As it has for half acentury, our combined retail and credit business model proved its strength andresiliency. Retail profitability cushioned the impact of credit performancevolatility inherent in subprime consumer credit. Had we not pushed ahead toexpand our retail sales, we would not have mitigated negative credit trends withstrongly growing retail profits. The growth in gross margin helped cushion theimpact of credit performance as well.

* * *

Turning to our credit segment, we completed the first quarter in May with highconfidence in the portfolio performance, improvement trend because of theactions taken over the last several quarters to improve performance. Those trendswere not sustained. The company's credit segment performance unexpectedlydeteriorated. Delinquency over 60 days increased 70 basis points in the quarterand was up another 50 basis points in August. Our failure to return to theexpected trend required adjustments to our expectations for future portfolio

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performance. Provision for loan losses and guidance then adjusted to reflectthis expectation.

The increase in delinquency occurred despite actions over the last several quartersto improve delinquency performance. Tighter underwriting policies for 2014 hasled to increases in average credit score underwritten, average credit score in theportfolio, and down payment percentage. The percentage of originations withFICO scores below 525 is virtually zero. And originations to customers with noscores down 40% from Q3 a year ago.

First payment to fall since the percentage of the portfolio is down 25% from theend of fiscal 2014. First payment to fall as a percentage of total delinquency isdown 27% as well. Entry ended delinquency and early stage delinquency in totalwas in line with past experience and the expectations built into our underwritingmodel. Early stage delinquency remained low at the end of August.

Operational execution improved measurably. Staffing has been at or above thecurrent need for two consecutive quarters ageing tenures improving. Staff over 12months with the company is up 50% yearoveryear and staff over 6 months withthe company is up 74%. Individual collections ageing performance is moreconsistent. The gap between top and bottom performers is narrowing. We addedexperienced talents for the collections management team from both outside hiresand promotion from within.

System enhancements have been implemented. Our systems have been stable andimproving. We have opportunities to improve certainly but execution is better notworse than in the recent past.

Late stage delinquency increased for all FICO scores, markets, product categories,years of origination, and customer groups. The increase in new customers as apercentage of the portfolio compared to a year ago is impacting delinquency aswe have commented on many times over the last year. However, the percentageof new customers was not significantly different in the second quarter than at theend of the first quarter. Once customers become delinquent more than 60 days,our customers are not resolving the delinquency at the same rate as in the past oras expected.

Customers are under pressure from the number of directions. Inflation of rents isone example, increased subprime issuance for vehicle purchases, and also thepressure in customer's ability to pay Conn's. Car loans and rent will generally rankahead of Conn's in customers priority to pay. Although we cannot specificallyidentify the causes for pressure on our customer's ability to resolve delinquency,we haven’t identified any internal factor causing the increase in delinquency.

We believe there are several factors that should help future performance of ouradded segment. Portfolio growth should be slower in fiscal 2015 than in fiscal

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2014, and slow further in fiscal 2016 due to slower same store sales growth, storeclosings, slower store opening pace as a percentage of existing stores, and morerestrictive underwriting. The anticipated slower same store sales growth shouldresult in increasing originations to repeat customers. As a percentage of theportfolio balance, we expect lower collections caused as the hiring pace andturnover subside.

Portfolio growth although slower will provide operating leverage on expenses forthis persistence for several of these and other fixed overhead. Delinquency ratesabout product category on slide 11. Declining electronic sales as a percentage ofthe total should benefit delinquency as well.

(Emphasis added).

23. Discussing the Company’s credit business, Poppe stated, in part:

As Theo already discussed despite improvements over the past few quarters incollection, execution, credit quality, and collection system performance we sawdelinquency deteriorate broadly across the portfolio. The recent delinquency inchargeoff trends as shown on slide 13, 60 plus day delinquency increased 70 basispoints during the quarter to 8.7%. This compares to our 150 basis point increasefor the same period in the prior year which was impacted by previously discussedsystem implementation issues.

Our expectation is that the delinquency rate will rise to just over 9% at the endof October. The net charge off rate increased 220 basis points sequentially to10%, partially impacted by the fact that we did not complete a sale of charge offaccounts during the quarter. This sequential increase is consistent with theexpectations we have communicated on the last earnings call though it washigher than originally anticipated. We expect the charge off rate to decline inthe third quarter due in part to the anticipated completion of additional chargeoffs account sales.

(Emphasis added).

24. As the conference called continued, Taylor stated, in part:

Credit segment revenues were $64 million this quarter, an increase of 38% overlast year. Annualized interest in fee yield was 18.2% up modestly from a yearago. Our yield is reduced by a provision for uncollectable interest and our use ofshort-term low interest financing to accelerate portfolio velocity.

Short term low interest receivables were 37% of the portfolio balance at quarterend, flat sequentially but up, 500 basis points from a year ago. As a percentage ofthe total portfolio balance we expect no interest receivables to decline gradually

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over the remainder of the year, with the elimination of the six month program andthe tightening of eligibility requirements to qualify for the 12month program.

General and administrative expenses for the credit segment were 40% above theprior year level, due to increased staffing. We invested in additional staff thisquarter to address expected portfolio growth in the third quarter. When comparedto the average portfolio balance, credit SG&A expense was 8.8% this quarter,consistent sequentially and year-over-year.

Provision for bad debts increased $18 million from the prior quarter, to $40million. This increase was driven by a 40% increase in the average portfoliobalance, higher than previously anticipated delinquency and expected futurecharge offs, and an increase in the level of accounts cumulatively re-age morethan three months during the quarter.

We provide for full life losses of accounts cumulatively re-age greater than threemonths. Growth in restructured or TDR accounts journey lags overall portfoliogrowth. With the rapid growth in the level of customer receivables seen in thesecond half of fiscal 2014 and the increase in delinquency levels, the volume ofrestructured accounts increased sequentially and year-over-year.

Provision for restructured accounts increased substantially from the prior yearquarter and accounted for approximately 20% of the year-over-year increase inprovision for bad debt. Our bad debt provision rate maybe influenced fromPeriod-to-period by the level of accounts we re-aged more than three months.

For the first six months of fiscal 2015 provision for bad debt was 11% of theaverage portfolio balance. Based on our current expectations of future chargeoff levels, delinquency trends and sales levels in the third and fourth quarters ofthe fiscal year, we estimate provision for bad debt to range between 11% to 12%on a full year basis. Reflecting the impact of higher provision for bad debt, thecredit segment reported an operating loss of $200,000 this quarter.

Interest expense increased $3 million year-over-year due to higher borrowingsand an increase in our overall effective interest rate. The increase in our effectiverate, reflects the July 1st issuance of $250 million of 7.25% senior notes. Netproceeds were used to pay down lower rate borrowings under our revolving creditfacility. The all in effective interest rate on the notes is approximately 7.6%.

(Emphasis added).

The Truth Emerges

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25. On December 9, 2014, the Company issued a press release announcing its third

quarter fiscal 2015 financial results. The press release revealed the Company’s increase in

provisions for bad debt and customer delinquency rates, stating in relevant parts:

Credit Segment Results (on a year-over-year basis unless otherwise noted)

Credit revenues increased 21.6% to $64.9 million. The credit revenue growth wasattributable to the increase in the average receivable portfolio balanceoutstanding. The customer portfolio balance equaled $1.25 billion at October 31,2014, rising 32.7%, or $308.7 million from the prior year. The portfolio interestand fee income yield on an annualized basis was 16.9% for the third quarter,down 90 basis points from the same period last year reflecting a higher provisionfor uncollectable interest.

Provision for bad debts for the three months ended October 31, 2014 was $72.0million, an increase of $49.4 million from the same prior-year period. The year-over-year increase was impacted by the following:

• New store openings of 18;• A 12.3% increase in the balances originated during the quarter compared

to the prior year;• An increase of 150 basis points in the percentage of customer accounts

receivable balances greater than 60 days delinquent to 10.0% at October31, 2014. Delinquency increased year-over-year across credit qualitylevels, customer groups, product categories, geographic regions andyears of origination. Despite tighter underwriting and better collectionsexecution, deterioration in the customer's ability to resolve delinquencycontinued throughout the quarter and the expectations for charge-offsover the next 12 months were adjusted to fully reflect this trend;

• Higher expected charge-offs over the next twelve-month period as lossesare occurring at a faster pace than previously anticipated, due to thecontinued deterioration in the customer's ability to resolve delinquency;

• The decision to pursue collection of past and future charged-off accountsinternally rather than selling charged off accounts to a third party. Thischange resulted in $7.6 million in additional provision as recoveries areexpected to occur over an extended time period, which results in areduction in expected cash recoveries over the next twelve months; and

• The balance of customer receivables accounted for as troubled debtrestructurings increased to $73.4 million, or 5.9% of the total portfoliobalance, driving $4.1 million of the increase in provision for bad debts.

(Emphasis added).

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26. In the same press release, the Company acknowledged that the forecasting of its

credit operations have not been acceptably accurate and announced the implementation of

additional oversight, stating in relevant parts:

Additional Oversight

Conn's also announced several new initiatives by its Board of Directors that areintended to enhance oversight of the business at a time when the seniormanagement team is contending with a combination of rapid portfolio growth anda more difficult credit collection environment. Although the Company's retailoperations have performed well, with successful new store openings and productmargin expansion, the performance of the Company's credit operations has beendisappointing several times over the last twelve months. Additionally, theCompany recognizes that its credit operations forecasting has not beenacceptably accurate.

To help address these challenges, the Board of Directors has established a CreditRisk and Compliance Committee. The Board of Directors members on thiscommittee will be responsible for reviewing credit risks, underwriting strategyand credit compliance activities. The committee will direct and supervise anindependent evaluation of underwriting standards to validate underwritingprocesses and results. A Board of Directors-directed evaluation of collectionsoperations by two independent third-party advisors has already been completed.These reviews identified no significant deficiencies in operations effectivenessbut did identify opportunities for improvement, particularly in collections costefficiency.

Additionally, the Board of Directors has approved two new positions to augmentits management team. The Board of Directors has initiated a search for aPresident, who will report directly to the Company's Chairman and ChiefExecutive Officer. The Company is seeking candidates for this position withdemonstrated senior leadership capabilities in large, complex retail and/orconsumer credit organizations. The Board of Directors has also initiated a searchfor a Chief Risk Officer, who will report to the Company's Chief OperatingOfficer and provide periodic reporting to the Credit Risk and ComplianceCommittee of the Board of Directors. The Board of Directors is taking theseactions in response to the growing scale and complexity of the Company's creditbusiness, along with increasing industry-wide regulatory scrutiny.

(Emphasis added).

27. In the same press release, the Company announced the withdrawal of its earnings

guidance for fiscal 2015, stating in relevant parts:

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Outlook and Guidance

With the ongoing review of strategic alternatives and the oversight initiativesbeing undertaken by the Company, the Company has decided to withdraw itsearnings guidance for fiscal 2015 and is not currently providing earningsguidance with respect to fiscal 2016.

The following are the Company's expectations for its business for the fourthquarter:

• Same stores sales flat to up 3%;• Retail gross margin between 39.0% and 40.0%;• Opening of 2 new stores during the quarter; and• Closure of 1 store during the quarter.

Beginning with December results, the Company will release, shortly after the endof the month, same store sales and greater than 60 days delinquency performance.The Company believes this will provide investors with timely, relevantinformation about business trends and expects to continue this practice until theCompany experiences more stability in its results.

28. In the same press release, the Company announced the abrupt resignation of

Taylor, effective immediately and the appointment of Mark Haley as his replacement.

29. In discussing the poor financial results for the quarter, Wright stated, in part:

In the third quarter, we drove significant growth and expanded gross margins inthe retail segment, but these gains were more than offset by additionalprovisions for credit losses. Customer credit scores continue to deteriorate.Despite underwriting changes reducing the percentage of originations tocustomers with scores below 550, the proportion of customers in late stagedelinquency with a score below 550 increased this year, though it has remainedrelatively constant since the end of the second quarter. As a result, delinquencyrates have increased and losses are being realized at a faster pace than originallyanticipated. We recorded additional provisions for credit losses this quarter, basedon the assumption that we will not realize any improvement in these trends overthe next 12 months, despite the underwriting changes and improved collectionsexecution. Although the realization of losses associated with the credit segment isoccurring at a faster pace than originally anticipated, at this time, we do notbelieve we will experience static loss rates that are significantly different from ourprevious estimates. November credit performance has provided evidence ofstabilizing credit trends, with the over-sixty-day delinquency rate holding steadyat 10%. The percentage of balances 31 to 60 days past due declined for the quarterand again in November 2014 to 3.3% as compared to 3.6% a year ago. We aredisappointed in this quarter's reported results, and we are committed to

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improving performance in the credit segment through better execution andoversight.

(Emphasis added).

30. On December 10, 2014, the Company filed its quarterly report on Form 10-Q for

the quarter ended October 31, 2014, which confirmed the financial results in the December 9,

2014 press release. The 10-Q was signed by Taylor’s replacement, Mark A. Haley.

31. On this news, shares of the Company fell $14.26 per share or over 40% to close at

$20.83 per share on December 9, 2014.

32. The true facts, which were known by Defendants but concealed from the

investing public during the Class Period, were as follows:

(a) Conn’s was growing its business and financial results by utilizing

underwriting and collections practices that, despite Defendants’ statements to the

contrary, weakened its portfolio quality and left it susceptible to substantial increases in

bad debt;

(b) Conn’s faced increased delinquency and charge off rates in its credit

segment;

(c) At all relevant times, Conn’s financial performance was substantially and

materially threatened due to the Company’s practices in its credit segment; and

(d) As a result of the foregoing, Defendants’ statements regarding the

Company’s financial performance and expected earnings in 2014 and 2015 were false

and misleading and lacked a reasonable basis when made.

ADDITIONAL SCIENTER ALLEGATIONS

33. As alleged herein, Defendants acted with scienter in that they knew that the public

documents and statements issued or disseminated in the name of the Company were materially

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false and misleading; knew that such statements or documents would be issued or disseminated

to the investing public; and knowingly and substantially participated or acquiesced in the

issuance or dissemination of such statements or documents as primary violations of the federal

securities laws. As set forth elsewhere herein in detail, Defendants, by virtue of their receipt of

information reflecting the true facts regarding Conn’s, their control over and/or receipt and/or

modification of allegedly materially misleading misstatements, and/or their associations with the

Company, which made them privy to confidential proprietary information concerning Conn’s,

participated in the fraudulent scheme alleged herein.

LOSS CAUSATION/ECONOMIC LOSS

34. During the Class Period, as detailed herein, Defendants engaged in a scheme to

deceive the market and a course of conduct that artificially inflated the price of Conn’s common

stock and operated as a fraud or deceit on Class Period purchasers of Conn’s common stock by

failing to disclose and misrepresenting the adverse facts detailed herein. When Defendants’ prior

misrepresentations, omissions, and fraudulent conduct were disclosed and became apparent to

the market, the price of Conn’s common stock fell precipitously as the prior artificial inflation

came out. As a result of their purchases of Conn’s common stock during the Class Period,

Plaintiff and the other Class members suffered economic loss, i.e., damages, under the federal

securities laws when the truth about Conn’s was revealed, which removed the artificial inflation

from the price of Conn’s common stock.

35. By failing to disclose to investors the adverse facts detailed herein, Defendants

presented a misleading picture of Conn’s business and prospects. Defendants’ false and

misleading statements had the intended effect and caused Conn’s common stock to trade at

artificially inflated levels throughout the Class Period, reaching as high as $51.03 per share on

July 2, 2014.

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36. As a direct result of the disclosure identified herein, the price of Conn’s common

stock fell precipitously. This removed the artificial inflation from the price of Conn’s common

stock, causing real economic loss to investors who had purchased Conn’s common stock at

artificially inflated prices during the Class Period.

37. The decline was a direct result of the nature and extent of Defendants’ fraud being

revealed to investors and the market. The timing and magnitude of the price decline in Conn’s

common stock negate any inference that the loss suffered by Plaintiff and the other Class

members was caused by changed market conditions, macroeconomic or industry factors, or

Company-specific facts unrelated to Defendants’ fraudulent conduct. The economic loss, i.e.,

damages, suffered by Plaintiff and the other Class members was a direct result of Defendants’

fraudulent scheme to artificially inflate the price of Conn’s common stock and the subsequent

significant decline in the value of Conn’s common stock when Defendants’ prior

misrepresentations and other fraudulent conduct were revealed.

APPLICABILITY OF PRESUMPTION OF RELIANCE:FRAUD ON THE MARKET DOCTRINE

38. At all relevant times, the market for Conn’s common stock was an efficient

market for the following reasons, among others:

(a) Conn’s common stock met the requirements for listing and was listed and

actively traded on the NASDAQ, a highly efficient and automated market;

(b) As a regulated issuer, Conn’s filed periodic public reports with the SEC;

(c) Conn’s regularly communicated with public investors via established

market communication mechanisms, including regular disseminations of press releases on the

national circuits of major newswire services and other wide-ranging public disclosures, such as

communications with the financial press and other similar reporting services; and

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(d) Conn’s was followed by several securities analysts employed by major

brokerage firms who wrote reports which were distributed to the sales force and certain

customers of their respective brokerage firms. Each of these reports was publicly available and

entered the public marketplace.

39. As a result of the foregoing, the market for Conn’s common stock promptly

digested current information regarding Conn’s from all publicly available sources and reflected

such information in the price of the stock. Under these circumstances, all purchasers of Conn’s

common stock during the Class Period suffered similar injury through their purchase of Conn’s

common stock at artificially inflated price and a presumption of reliance applies.

NO SAFE HARBOR

40. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

Many of the specific statements pleaded herein were not identified as “forward-looking

statements” when made. To the extent there were any forward-looking statements, there were no

meaningful cautionary statements identifying important factors that could cause actual results to

differ materially from those in the purportedly forward-looking statements. Alternatively, to the

extent that the statutory safe harbor does apply to any forward-looking statements pleaded

herein, Defendants are liable for those false forward-looking statements because at the time each

of those forward-looking statements was made, the particular speaker knew that the particular

forward-looking statement was false and/or the forward-looking statement was authorized and/or

approved by an executive officer of Conn’s who knew that those statements were false when

made.

COUNT I

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FOR VIOLATION OF SECTION 10(b) OF THE 1934 ACT AND RULE10b-5 AGAINST ALL DEFENDANTS

41. Plaintiff incorporates ¶¶ 1-40 by reference.

42. During the Class Period, Defendants disseminated or approved the false

statements specified above, which they knew or deliberately disregarded were misleading in that

they contained misrepresentations and failed to disclose material facts necessary in order to make

the statements made, in light of the circumstances under which they were made, not misleading.

43. Defendants violated §10(b) of the 1934 Act and Rule 10b-5 in that they:

(a) employed devices, schemes, and artifices to defraud;

(b) made untrue statements of material facts or omitted to state material facts

necessary in order to make the statements made, in light of the circumstances under which they

were made, not misleading; or

(c) engaged in acts, practices, and a course of business that operated as a

fraud or deceit upon Plaintiff and others similarly situated in connection with their purchases of

Conn’s common stock during the Class Period.

44. By virtue of the foregoing, Conn’s and the Individual Defendants have each

violated §10b of the 1934 Act, and Rule 10b-5 promulgated thereunder.

45. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and

the Class have suffered damages in connection with their respective purchases and sales of

Conn’s common stock during the Class Period, because, in reliance on the integrity of the

market, they paid artificially inflated prices for Conn’s common stock and experienced loses

when the artificial inflation was released from Conn’s common stock as a result of the partial

revelations and stock price decline detailed herein. Plaintiff and the Class would not have

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purchased Conn’s common stock at the prices they paid, or at all, if they had been aware that the

market prices had been artificially and falsely inflated by Defendants’ misleading statements.

COUNT II

FOR VIOLATION OF SECTION 20(a) OF THE 1934 ACTAGAINST THE INDIVIDUAL DEFENDANTS

46. Plaintiffs repeat and re-allege each and every allegation contained above as if

fully set forth herein.

47. This second claim under §20(a) of the Exchange Act is alleged against the

Individual Defendants, only, based on the primary violation of §10b and Rule 10b-5 by Conn’s.

48. The Individual Defendants acted as controlling persons of Conn’s within the

meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level

positions, and their ownership and contractual rights, participation in and/or awareness of the

Company’s operations and/or intimate knowledge of the false and misleading information

disseminated to the investing public, these defendants had the power to influence and control and

did influence and control, directly or indirectly, the decision making of the Company, including

the content and dissemination of the various statements which plaintiff contends are false and

misleading. These defendants were provided with or had unlimited access to copies of the

Company’s reports, press releases, public filings and other statements alleged by plaintiff to be

misleading prior to and/or shortly after these statements were issued and had the ability to

prevent the issuance of the statements or cause the statements to be corrected.

49. In particular, each of these defendants had direct and supervisory involvement in

the day-to-day operations of the Company and, therefore, is presumed to have had the power to

control or influence the particular transactions giving rise to the securities violations as alleged

herein, and exercised the same.

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50. As set forth above, Conn’s violated Section 10(b) and Rule 10b-5 by their acts

and omissions as alleged in this Complaint. By virtue of their positions as controlling persons of

Conn’s, the Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act.

51. As a direct and proximate result of defendants’ wrongful conduct, plaintiffs and

other members of the Class suffered damages in connection with their purchases of the

Company’s securities during the Class Period.

52. This action is being brought within two years after the discovery of the untrue

statements and omissions and within five years after their issuance.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for judgment as follows:

A. Determining that this action is a proper class action, designating Plaintiff as Lead

Plaintiff, and certifying Plaintiff as a Class representative under Rule 23 of the Federal Rules of

Civil Procedure and Plaintiff’s counsel as Lead Counsel;

B. Awarding compensatory damages in favor of Plaintiff and the other Class

members against all Defendants, jointly and severally, for all damages sustained as a result of

Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon;

C. Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

this action, including counsel fees and expert fees; and

D. Awarding such equitable, injunctive, or other relief as the Court may deem just

and proper.

JURY DEMAND

Plaintiff demands a trial by jury.

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Dated: December 12, 2014THE LAW OFFICES OF HOWARDG. SMITHHoward G. Smith3070 Bristol Pike, Suite 112Bensalem, PA 19020Telephone: (215) 638-4847Facsimile: (215) 638-4867Email: hsmith@howardsmithlaw.com

COUNSEL FOR PLAINTIFF