Atlas Financial Holdings, Inc.
- Company Name
- Atlas Financial Holdings, Inc.
- Stock Symbol
- Class Period
- March 13, 2017 to March 2, 2018
- Motion Deadline
- May 4, 2018
- Northern District of Illinois
The complaint charges Atlas and certain of its officers with violations of the Securities Exchange Act of 1934. Atlas provides specialty commercial transportation insurance for taxi, limousine, paratransit and other transport businesses throughout the United States.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s business and operations. Specifically, defendants failed to disclose that the Company’s internal controls were not sufficient to ensure appropriate accounting practices, including, but not limited to, the calculation of certain loss reserves, and that, as a consequence, the Company’s internal controls over financial reporting were materially weak and its financial statements were inaccurate and misleading and understated certain loss reserves. As a result of defendants’ false statements and/or omissions, Atlas securities traded at artificially inflated prices, with its stock price reaching a high of more than $21 per share during the Class Period.
Then on March 1, 2018, Atlas announced a large increase in its reserves related largely to commercial auto claims from 2015 and prior. The Company stated that the reserve increase was based on a “comprehensive review of its reserves” and “year-end actuarial work coupled with a detailed internal file audit for claims with reserves not established by the Company’s predictive analytics tools.” According to the Company, “this significant reserve increase [was] necessary to ensure sufficient IBNR [incurred but not reported] levels to extinguish the remaining claims especially for older accident years.” On this news, the price of Atlas shares fell $7.70 per share, or over 40%, to close at $11.10 per share on March 2, 2018.