According to the law firm press release, The Allstate Corporation ("Allstate") is the largest publicly traded personal lines insurance company in the United States. Personal lines insurance includes homeowner, renter, motorcycle and auto insurance.
The Complaint alleges that during the Class Period, Defendants issued false and misleading statements and/or failed to disclose adverse information regarding the Company's business and prospects, including that the reason for the sudden spike in its auto claims frequency, which Defendants claimed was due to external events beyond the Company's control, including the weather and increased miles driven, was actually the result of Allstate's growth in its auto policy business through higher risk drivers. As a result of Defendants' false statements and/or omissions, Allstate stock traded at artificially inflated prices during the Class Period, reaching a high of $72.58 per share, and certain of the Company's insiders, including its CEO, were able to sell their Allstate shares at artificially inflated prices.
Then on August 3, 2015, after the market closed, Allstate announced disappointing second quarter 2015 financial results, reporting a third consecutive quarter of increased auto claims frequency, a 57% decline in operating income, and operating earnings per share that were $0.34 below analysts' consensus estimate. Following the earnings release, the Company's CEO stated that the lower quarterly profit was "driven by a deterioration in auto insurance margins" and explained that "[a]uto insurance margins decreased as higher claim frequency and severity more than offset average auto insurance price increases." As a result of these revelations, the price of Allstate stock fell $7.04 per share to close at $62.34 per share on August 4, 2015.
On January 17, 2017, the Court issued an Order appointing Lead Plaintiffs and Counsel. Lead Plaintiffs filed a consolidated Complaint on March 30. Defendants filed a Motion to Dismiss the consolidated Complaint on June 1. On February 27, 2018, the Court issued an Order denying Defendants' Motion to Dismiss.
Lead Plaintiffs filed a Motion for Class Certification on June 22, 2018 and filed a second amended consolidated Complaint on September 12. On March 26, 2019, the Court issued an Order granting Plaintiffs' Motion for Class Certification. On April 25, Defendants filed a Notice appealing the Court's class certification Order. On August 7, 2020, the Court of Appeals vacated the District Court's Order certifying the class and remanded the case for further proceedings. On December 21, the Court granted the Motion for Class Certification.
Defendants filed a Motion for Summary Judgment on March 23, 2022. On July 26, the Court issued an Order granting in part and denying in part Defendants' Motion for Summary Judgment.
On August 11, 2023, the parties entered into a Stipulation and Agreement of Settlement.