The complaint charges Allstate and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Allstate is the largest publicly traded personal lines insurance company in the United States. Personal lines insurance includes homeowner, renter, motorcycle and auto insurance.
The complaint alleges that during the Class Period, defendants issued false and misleading statements and/or failed to disclose adverse information regarding the Company's business and prospects, including that the reason for the sudden spike in its auto claims frequency, which defendants claimed was due to external events beyond the Company's control, including the weather and increased miles driven, was actually the result of Allstate's growth in its auto policy business through higher risk drivers. As a result of defendants' false statements and/or omissions, Allstate stock traded at artificially inflated prices during the Class Period, reaching a high of $72.58 per share, and certain of the Company's insiders, including its CEO, were able to sell their Allstate shares at artificially inflated prices.
Then on August 3, 2015, after the market closed, Allstate announced disappointing second quarter 2015 financial results, reporting a third consecutive quarter of increased auto claims frequency, a 57% decline in operating income, and operating earnings per share that were $0.34 below analysts' consensus estimate. Following the earnings release, the Company's CEO stated that the lower quarterly profit was "driven by a deterioration in auto insurance margins" and explained that "[a]uto insurance margins decreased as higher claim frequency and severity more than offset average auto insurance price increases." As a result of these revelations, the price of Allstate stock fell $7.04 per share to close at $62.34 per share on August 4, 2015.
Plaintiff seeks to recover damages on behalf of all purchasers of Allstate common stock during the Class Period (the "Class"). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is widely recognized as one of the leading law firms advising U.S. and international institutional investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history and was ranked first in both total amount recovered for investors and number of securities class action recoveries in ISS's SCAS Top 50 Report for the last two years. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm's clients. Robbins Geller not only secures recoveries for defrauded investors, it also strives to implement corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit rgrdlaw.com/cases/allstate/ for more information.
Logo - http://photos.prnewswire.com/prnh/20150415/198876LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/robbins-geller-rudman--dowd-llp-files-class-action-suit-against-the-allstate-corporation-300361085.html
SOURCE Robbins Geller Rudman & Dowd LLP