NEW YORK (Legal Newsline) - Grant & Eisenhofer will lead shareholder litigation against a Bermuda-based international underwriter accused of misleading investors.
New York federal judge Lewis Kaplan on Jan. 18 approved the firm's motion to be appointed lead counsel against Argo Group International Holdings. No other firms filed similar motions.
Grant & Eisenhofer snagged two major public retirement funds as clients that will serve as lead plaintiffs - the Police & Fire Department System City of Detroit and Oklahoma Law Enforcement Retirement System.
The firm's motion said its clients lost $900,000 during a stock drop about a year ago.
"(T)he Court finds that the Retirement Funds' counsel of choice... has extensive experience in securities class actions and has served as lead counsel in several securities class actions," Kaplan wrote.
The suit says Argo hid a "construction defect" in its core business, leading to a $7.11 drop in its value per share in February 2022.
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.