Argo class action lawsuit alleges ‘false and misleading’ disclosures
The Police and Fire Retirement System for the City of Detroit has filed a class-action lawsuit against Argo Group International Holdings that alleges the company defrauded investors by issuing “false and misleading” statements about its ability to set appropriate reserves.
The plaintiffs are asking for a jury trial in the case against Argo and five officers and former officers of the company, including Thomas Bradley, Scott Kirk, Kevin Rehnberg, Mark Watson III, and Jay Bullock.
The federal securities class action has been brought on behalf of investors that purchased or otherwise acquired Argo common stock during the period from February 13, 2018 through August 9, 2022.
The plaintiffs claim that information they received from Argo was “materially false and/or misleading” because: Argo’s reserves were wholly inadequate and its underwriting standards were not prudent as was represented; Argo had dramatically changed its underwriting policies on certain US construction contracts as far back as 2018; and these policies were underwritten outside of the company’s “core” business including in certain states and for certain exposures that were far riskier than investors understood and that the company no longer would service moving forward.
“Ultimately, the effects of the changes in policies, all of which were known to [the] Defendants during the Class Period, led to massive and belatedly-disclosed adverse reserve developments,” according to the text of the lawsuit.
It continued: “Between February 2022, when Argo announced that its results for the fourth quarter of 2021 would be negatively impacted by $130 to $140 million worth of adverse prior year reserve development and non-operating charges, and August 2022, when [the] Defendants announced further bad news regarding the company’s US casualty reserves, Argo’s share price declined precipitously, losing more than 60% in value to date in 2022.
“As a result of [the] Defendant’s wrongful acts, and the precipitous decline in the market value of the company’s securities, the class of investors Plaintiff seeks to represent has suffered significant losses and damages.”
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