WHITE PLAINS, N.Y. (Legal Newsline) - A Bermuda-based international underwriter is facing a federal securities lawsuit from the City of Detroit's police and fire department retirement and contribution fund.
The Police & Fire Department System City of Detroit filed a complaint Oct. 20 in the U.S. District Court for the Southern District of New York against Argo Group International Holdings LTD, Thomas A. Bradley, Scott Kirk, Kevin J. Rehnberg, Mark E. Watson, III and Jay S. Bullock alleging violation of federal securities laws.
According to the plaintiffs' class action, Argo underwrites international specialty insurance products in the property and casualty markets. The plaintiffs allege that Argo assured investors who purchased Argo stock from Feb. 13, 2018, through Aug. 9, 2022, of the company's success in managing its reserves.
They further allege that Argo's assurances were false and misleading because the company's reserves were "wholly inadequate" and because Argo "dramatically" changed its underwriting polices on some U.S. construction contracts.
The plaintiffs also allege that Argo's polices were underwritten "outside the company's 'core' business" and exposed the company to far riskier business than investors understood. The plaintiffs claim that due to the defendants' actions, Argo's common stock fell $7.11 per share in February of 2022 and that Argo was hiding information about the company's "construction defect" for five years.
The plaintiffs seek monetary relief, interest, trial by jury and all other just relief. They are represented by Daniel Berger and Karin Fisch of Grant & Eisenhoffer PA in New York.
U.S. District Court for the Southern District of New York case number 1:22-CV-08971