According to the law firm press release, AmTrust, through its subsidiaries, underwrites and provides property and casualty insurance in the United States and internationally. The company operates in four segments: Small Commercial Business, Specialty Risk and Extended Warranty, Specialty Program, and Personal Lines Reinsurance.
The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that the Company: 1) manipulated its loan loss reserves in order to inflate reported earnings; 2) manipulated its deferred tax liabilities; 3) underestimated the discount rates for its life settlement contracts in an effort to inflate the Company's reported assets and total stockholder's equity; 4) the Company lacked adequate internal and financial controls; and 5) as a result of the foregoing, the Company's statements were materially false and misleading at all relevant times.
On December 12, 2013, a report by analyst firm Geoinvesting exposed certain alleged accounting improprieties at AmTrust. Such improprieties included: 1) manipulation of the Company's loan loss reserves; 2) manipulation of the Company's deferred tax liabilities; and 3) underestimating the Company's discount rates for its life settlement contracts.
On this news, shares of AmTrust fell $4.63 per share, more than 12%, on intraday trading, to a price of $33.67 on December 12, 2013.
On April 24, 2014, the Court issued an Order consolidating cases, appointing lead plaintiff, and approving the selection of lead counsel. Lead Plaintiff filed an amended and consolidated complaint on July 7.
On September 29, 2015, the Court issued an Order granting Defendants' motion to dismiss. This case was terminated. Plaintiffs filed a Notice of Appeal of this decision on October 19. On June 9, 2016, the Court of Appeals issued a Mandate affirming the judgment of the District Court.