Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Hallmark Financial Services, Inc. ("Hallmark Financial" or the "Company") HALL securities between March 5, 2019 and March 17, 2020, inclusive (the "Class Period"). Hallmark Financial investors have until July 6, 2020 to file a lead plaintiff motion.
Investors suffering losses on their Hallmark Financial investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to howardsmith@howardsmithlaw.com.
On March 2, 2020, Hallmark Financial announced that it had decided to exit from its Binding Primary Commercial Auto business and reported a $63.8 million loss development for prior underwriting years.
On this news, the Company's share price fell $2.10, or more than 14%, to close at $12.23 per share on March 3, 2020, on unusually heavy trading volume.
On March 11, 2020, Hallmark Financial disclosed that it had dismissed its independent auditor, BDO USA, LLP ("BDO"), due to a disagreement regarding estimates for reserves for unpaid losses, among other things.
On this news, the Company's share price fell $2.39, or over 29%, to close at $5.71 per share on March 12, 2020, on unusually heavy trading volume.
On March 17, 2020, Hallmark Financial filed with the SEC a letter from BDO in which BDO stated "BDO expanded significantly the scope of its audit on January 31, 2020, with respect to which a substantial portion of the requests had not been received and/or tested prior to our termination."
On this news, the Company's share price fell $0.08, or 2.5%, to close at $3.12 per share on March 18, 2020.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company lacked effective internal controls over accounting and financial reporting related to reserves for unpaid losses; (2) that the Company improperly accounted for reserve for unpaid losses and loss adjustment expenses related to its Binding Primary Commercial Auto business; (3) that, as a result, Hallmark Financial would be forced to report a $63.8 million loss development for prior underwriting years; (4) that, as a result, Hallmark Financial would exit from its Binding Primary Commercial Auto business; and (5) that, as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased Hallmark Financial securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200507005146/en/
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