A class action suit was filed on Jan 12, against MetLife Inc., (MetLife) (NYSE:MET) with charges stemming from allegations that certain officers and directors violated the Securities Exchange Act of 1934 by knowingly making misleading statements pertaining to the company’s financial obligations and therefore distorting the attractiveness of company stock.
The class actions suit, which commenced in the US District Court for the Southern District of New York seeks to recover damages for those who purchased MetLife common stock during the Class Period (February 2, 2010- October 6, 2011).
The suit is being handled by Robbins Geller Rudman & Dowd (Robbins Geller). The firm, which is experienced in dealing with cases involving defrauded investors, maintains that any purchasers of common stock within the Class Period are eligible to join the suit. Darren Robbins of Robbins Geller said, “I think institutional investors who purchased these shares during the period find this deeply troubling.”
Specifically the complaint deals with deceiving statements that were made by individual officers and directors pertaining to the company’s future financial health in regards to its liability to policyholders, beneficiaries, and state authorities.
On August 5, 2011 on the heels of a Form 10-Q filed with the SEC, the company announced that regulatory investigations into its death benefits practices potentially could result in a substantial escheatment to states coupled with administrative penalties. The stock price reacted by dropping by 11% the following day.
On October 6, 2011 MetLife filed a Form 8-K with the SEC that acknowledged that the company would be hit with a $115 million after-tax charge to meet reserve requirements associated with their death benefits practice. The stock price then reacted by declining further until it hit $28.80 a share on October 7, 2011.
MetLife spokesman John Calagna said “We believe all of our disclosures were appropriate.”