NEW YORK, July 29, 2021 /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of James River Group Holdings, Ltd. ("James River" or the "Company") (NASDAQ: JRVR). Such investors are advised to contact Robert S. Willoughby at [email protected] or 888-476-6529, ext. 7980.
The investigation concerns whether James River and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
In 2014, James River ramped up its Commercial Auto Division by underwriting a new type of insurance policy that covered Rasier LLC ("Rasier"), a subsidiary of the ride-sharing company Uber Technologies, Inc. (together with Rasier, "Uber").
After the market close on October 8, 2019, James River announced that it had delivered a notice of early cancellation, effective December 31, 2019, for all insurance policies issued to Uber, though the Company would remain contracted to provide coverage for future claims related to the period the Company's Uber policies were in effect (known as "runoff"). The Company stated that "[the Uber] account ha[d] not met our expectations for profitability."
In response to these developments, James River's stock price declined $11.06 per share, or 22.59%, to close at $37.88 per share on October 9, 2019.
Then, on May 5, 2021, James River disclosed an additional $170 million of unfavorable reserves related to the Uber policies. On a related conference call, James River revealed that the increase was due to a change from using "industry data, pricing data, experience data, average claim severity data, and blended methodologies" to "using only our own loss experience in our paid and incurred reserve projections . . . [to calculate] a better and more conservative estimate of ultimate losses on this account." Simultaneously, in order to cover its losses, the Company announced that it was seeking to raise $175 million through a public equity offering, which was priced at "the sector's steepest discount ever" according to Bloomberg.
On this news, James River's stock price dropped $12.27 per share, or 26.38%, from a closing price of $46.50 per share on May 5, 2021, to close at $34.23 per share on May 6, 2021.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
Robert S. Willoughby
888-476-6529 ext. 7980
SOURCE Pomerantz LLP