Pomerantz LLP announces that a class action lawsuit has been filed against AmTrust Financial Services, Inc. (“AmTrust” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 17-cv-01545, is on behalf of a class consisting of investors who purchased or otherwise acquired AmTrust securities, seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
AmTrust, through its subsidiaries, underwrites and provides property and casualty insurance in the United States and internationally. It operates in three segments: Small Commercial Business; Specialty Risk and Extended Warranty; and Specialty Program. AmTrust distributes its policies through a network of retail and wholesale agents, as well as through third-party brokers, agents, retailers, or administrators.
The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) AmTrust had ineffective assessment of the risks associated with its financial reporting; (ii) the Company had an insufficient complement of corporate accounting and corporate financial reporting resources within the organization; (iii) in turn, the Company lacked effective internal controls over financial reporting; and (iv) as a result of the foregoing, AmTrust’s public statements were materially false and misleading at all relevant times.
On February 27, 2017, AmTrust issued a press release entitled “AmTrust Financial Services, Inc. Reports Fourth Quarter 2016 Net Income Per Diluted Share of $0.57 and Operating Earnings Per Diluted Share of $0.38, Reflecting Strengthening of Reserves.” The press release advised investors that AmTrust had “identified material weaknesses in its internal control over financial reporting that existed as of December 31, 2016, specifically related to ineffective assessment of the risks associated with the financial reporting, and an insufficient complement of corporate accounting and corporate financial reporting resources within the organization."
On this news, AmTrust’s share price fell $5.32, or 19.23%, to close at $22.34 on February 27, 2017.