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Case Status:    SETTLED
On or around 06/20/2017 (Date of order of distribution of settlement)

Filing Date: February 05, 2010

According to a press release dated February 05, 2010, the complaint charges CRM Holdings and certain of the Company’s executive officers and directors with violations of federal securities laws. CRM Holdings is a provider of workers' compensation insurance products. Its main business activities include underwriting primary workers compensation insurance policies, underwriting workers’ compensation reinsurance and excess insurance policies, and providing fee-based management and other services to self-insured entities. The Complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements concerning CRM Holdings’ financial performance and prospects were materially false and misleading. Specifically, defendants made false and/or misleading statements and/or failed to disclose: (1) that Defendants and their affiliates engaged in a fraudulent scheme and course of business to grow membership in eight self-insured groups (the “Trusts”) previously administered by CRM, by charging premiums below commercial rates; (2) that the membership growth inflated gross trust revenues while reducing net paid premium income to the level that the assets of the Trusts would become insufficient to cover liabilities; (3) that, accordingly, the Trusts would fall below “fully funded” status; (4) that, as part of their fraudulent scheme and course of business to cover up the difference between assets and liabilities, Defendants and their affiliates disguised the true financial conditions of the Trusts by engaging in certain improprieties designed to result in minimal projected claims liability, including under-reserving individual claims and utilizing improper actuarial/accounting methods; (5) that Defendants and their affiliates provided the New York State Workers’ Compensation Board (WCB) with materially false and/or misleading financial and actuarial reports for the Trusts which reflected artificially reduced liabilities; (6) that, as a result of the above, the Company was exposed to hundreds of millions of dollars in liabilities relating to the under-funding of the Trusts; (7) that the Company lacked adequate internal and financial controls; and (8) that, as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.

On October 3, 2008, CRM Holdings disclosed that it had received a letter from the WCB indicating its intention to initiate legal proceedings against the Company on behalf of the Trusts related to CRM Holdings' actions while acting as the administrator and broker of record for the Trusts. On this news, over the next two days of trading, shares of CRM Holdings declined $0.61 per share, or 24.31%, to close on October 7, 2008 at $1.91 per share.

Then, on November 5, 2008, CRM Holdings reported its financial results for the 2008 fiscal third quarter and announced that during third quarter the Company had approximately $2.5 million of loss reserve increases that would have otherwise been reflected in the first and second quarter of 2008.

As a result of this news, over the following three days of trading, CRM Holdings shares declined $0.58 per share, or more than 36%, to close on November 7, 2008, at $1.03 per share, on high volume.

On May 21, 2010, an Order Granting Motion Of Breit Brandes And Beverly L. Munter For Appointment As Lead Plaintiff And Approval Of Glancy Binkow & Goldberg LLP as Lead Counsel was granted by the Court.

On September 10, 2010, a Consolidated Amended Complaint was filed by the lead plaintiffs against the defendants.

On May 24, 2011, the defendants filed a Notice of Filing of Bankruptcy Petition.

On May 10, 2012, the Court issued an Order granting the Defendants' motion to dismiss with respect to the Individual Defendants. The Court ruled that the Plaintiffs will not be given leave to replead, as the CAC is Plaintiffs’ second complaint in this action, and Plaintiffs have already had the benefit of extensive discovery, which they relied on in crafting the CAC.

On March 4, 2013, the Court issued an Order denying the Plaintiffs' Motions for Reconsideration of the above May 10 Order. On the next day, the Plaintiffs gave notice of their amendment to an earlier filed Notice of Appeal to include the Court's Order denying the Motions for Reconsideration.

On April 26, 2013, the Court of Appeals issued an Order granting the appellants' motion to stay the appeal pending further action in the district court.

On May 15, 2013, the Court issued an Order granting the revised motion of Lead Plaintiffs for issuance of a final judgment in favor of the individual defendants. On July 30, the Court issued an Order granting the renewed motion of Lead Plaintiffs for issuance of a final judgment in favor of the individual defendants. On August 29, the Lead Plaintiffs filed a Notice appealing this Order.

COMPANY INFORMATION:

Sector: Financial
Industry: Insurance (Prop. & Casualty)
Headquarters: Bermuda

SECURITIES INFORMATION:

Ticker Symbol: CRMH
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 10-CV-00975
JUDGE: Hon. Robert P. Patterson
DATE FILED: 02/05/2010
CLASS PERIOD START: 12/21/2005
CLASS PERIOD END: 11/05/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Glancy Binkow & Goldberg LLP (Los Angeles)
    1801 Ave. of the Stars, Suite 311, Glancy Binkow & Goldberg LLP (Los Angeles), CA 90067
    310.201.915 310. 201-916 · info@glancylaw.com
  2. Law Offices of Howard G. Smith
    3070 Bristol Pike, Suite 112, Law Offices of Howard G. Smith, PA 19020
    215.638.4847 215.638.4867 ·
  3. Murray, Frank & Sailer LLP
    275 Madison Ave 34th Flr, Murray, Frank & Sailer LLP, NY 10016
    212.682.1818 212.682.1892 · email@murrayfrank.com
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 10-CV-00975
JUDGE: Hon. Robert P. Patterson
DATE FILED: 09/10/2010
CLASS PERIOD START: 12/21/2005
CLASS PERIOD END: 11/05/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Glancy Binkow & Goldberg LLP (Los Angeles)
    1801 Ave. of the Stars, Suite 311, Glancy Binkow & Goldberg LLP (Los Angeles), CA 90067
    310.201.915 310. 201-916 · info@glancylaw.com
  2. Law Offices of Howard G. Smith
    3070 Bristol Pike, Suite 112, Law Offices of Howard G. Smith, PA 19020
    215.638.4847 215.638.4867 ·
No Document Title Filing Date