On March 2, 2020, Hallmark revealed its decision to “exit its Binding Primary Auto business.” In one day, Hallmark’s share price fell $2.10, to close at $12.23 per share. Then, on March 11, 2020, Hallmark announced that it had fired its public accounting firm over “a disagreement,” causing the share price to fall nearly 30%, to close at $5.71 per share. Then on March 17, 2020, Hallmark filed a letter with the SEC indicating that the former public accounting firm had “expanded significantly the scope of its audit on January 31, 2020,” and on this news Hallmark’s shares fell to $2.38 per share.
The lawsuit alleges that Hallmark misled investors through its public statements, specifically, that: (1) the Company lacked effective internal controls over accounting and financial reporting related to reserves for unpaid losses; (2) the Company improperly accounted for reserve for unpaid losses and loss adjustment expenses related to its Binding Primary Commercial Auto business; (3) as a result, Hallmark Financial would be forced to report a $63.8 million loss development for prior underwriting years; (4) as a result, Hallmark Financial would exit from its Binding Primary Commercial Auto business; and (5) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times. According to the suit, these true details were disclosed by a market research firm.
Hallmark Financial Services
Investors who purchased the Company’s securities between March 5, 2019 and March 17, 2020 are eligible to participate in this class action. Please use the form below to insert your trade information or send your trade information to email@example.com
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We also encourage you to contact Lesley F. Portnoy of The Portnoy Law Firm, at 310.692.8883, to discuss your rights free of charge. You can also reach us through the firm’s website at www.portnoylaw.com, or by email at email@example.com.
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