SAN FRANCISCO, CA / ACCESSWIRE / May 28, 2020 / Hagens Berman urges investors in Hallmark Financial Services, Inc. (HALL) who have suffered significant losses to submit their losses now. A securities fraud class action was filed and certain investors may have valuable claims.
Hallmark Financial Services (HALL) Securities Class Action:
The complaint alleges that throughout the Class Period, Defendants misrepresented and concealed: (1) that the Company lacked effective internal controls over accounting and financial reporting related to reserves for unpaid losses; and (2) that the Company improperly accounted for reserves for unpaid losses and loss adjustment expenses related to its Binding Primary Commercial Auto business.
Investors began to learn the truth, according to the complaint, through a series of disclosures beginning on Mar. 2, 2020, when Hallmark announced it was exiting the Binding Primary Commercial Auto business and reported a $63.8 million loss development for prior underwriting years.
Then, on Mar. 11, 2020, Hallmark announced it had dismissed its independent auditor BDO over a "disagreement" concerning the Company's estimated reserves for unpaid losses and loss adjustment expenses throughout 2019.
Finally, on Mar. 17, 2020, Hallmark disclosed a letter from BDO to the SEC revealing that BDO had expanded significantly the scope of its audit on Jan. 31, 2020, with respect to the matters of disagreement, and that "a substantial portion the requests had not been received and/or tested prior to our termination."
These disclosures caused Hallmark shares to decline over 75% lower between Mar. 2 and Mar. 18, 2020.
"We're focused on proving Defendants intentionally misled investors about the Company's internal controls and the sufficiency of its loss reserves," said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you purchased shares of Hallmark and suffered significant losses, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding Hallmark should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email HALL@hbsslaw.com.
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SOURCE: Hagens Berman Sobol Shapiro LLP
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