- Company Name
- MetLife, Inc.
- Stock Symbol
- Class Period
- February 27, 2013 to January 29, 2018
- Motion Deadline
- April 6, 2018
The complaint charges MetLife and certain of its officers and/or directors with violations of the Securities Exchange Act of 1934. MetLife provides life insurance, annuities, employee benefits and asset management products in the United States and internationally.
The complaint alleges that throughout the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding MeLife’s business and operations, including that MetLife’s practices and procedures used to estimate its reserves related to certain group annuitants that were missing or unresponsive over time were inadequate due to a material weakness in MetLife’s internal control over financial reporting. As a result of these false statements and/or omissions, MetLife’s securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $55 per share.
On December 15, 2017, MetLife announced that it had not been able to locate “a small subset of [its] total group annuitant population of approximately 600,000 that have moved jobs, relocated, or otherwise can no longer be reached via information provided for them.” According to the Company, “the portion of the subset that is most impacted is less than 5% of [its] total group annuitant population and they tend to be smaller size cases with average benefits of less than $150 per month.” The Company also stated that it would provide an update on the situation when it filed its annual report on Form 10-K. The same day, The Wall Street Journal published an article discussing how MetLife failed to pay monthly pension benefits, stating that “[s]ome Wall Street analysts assume that the payments could be 10 or more years overdue,” and that at “$150 per month for 30,000 people – 5% of the 600,000 – over 10 years, that could be up to $540 million.”
Then on January 29, 2018, MetLife preannounced its preliminary fourth quarter 2017 earnings and stated that it would need to rescheduled its earning release and related conference call for the fourth quarter and year-end 2017 because the Company had identified material weaknesses in its internal control over financial reporting. In addition, the Company stated that it would have to make revisions to its prior financial statements and that the SEC and New York Department of Financial Services (“NYDFS”) had made inquiries to the Company about the matter. According to MetLife, “[m]anagement of the company has determined the prior release of group annuity reserves resulted from a material weakness in internal control over financial reporting,” and the Company expected “the full year 2017 net income impact to be between $165 million and $195 million pre-tax. In addition, the company intends to make prior period revisions to reflect the balance of these adjustments in the appropriate historical periods.” MetLife also disclosed that it was “responding to questions from [the NYDFS] and other state regulators” and that the SEC’s “enforcement staff ha[d] also made an inquiry regarding this matter and MetLife is responding to its questions.” On this news, the price of MetLife shares fell $6.28 per share, or more than 11%, over the next two trading days to close at $47.67 per share on January 31, 2018.