Shuman, Glenn & Stecker Investigates Hallmark Financial Services, Inc.

Rhea-AI Summary

Shuman, Glenn & Stecker is investigating potential claims against officers of Hallmark Financial Services (HALL) following allegations in a securities class action. The lawsuit claims that Hallmark misrepresented its loss reserves and claims management processes. On March 2, 2020, Hallmark announced a $63.8 million increase in loss reserves, leading to a significant drop in stock price. Further issues arose with the termination of its independent auditor, BDO, causing additional declines in stock value. Hallmark's shares fell over 78% during this period.

Positive

• None.

Negative

• Allegations of misrepresentation regarding loss reserves and claims management.
• Stock price fell significantly after announcing increased loss reserves.
• Termination of independent auditor BDO led to further stock price decline.
• Hallmark's share price decreased over 78% from March 2 to March 17, 2020.

Shuman, Glenn & Stecker announces that it is investigating potential claims against certain officers and directors of Hallmark Financial Services, Inc. (“Hallmark” or the “Company”) (NASDAQ: HALL). Hallmark is a diversified property/casualty insurance group.

The Firm’s investigation relates to allegations raised in a securities class action against Hallmark and certain of its senior officers in the U.S. District Court for the Northern District of Texas. The lawsuit alleges that the defendants falsely stated, among other things, that: (a) Hallmark’s loss reserve amount was adequate, appropriately calculated, effectively managed, and properly maintained to account for unpaid losses associated with Hallmark’s insurance claim files; (b) Hallmark’s claims management process included aggressively closing out new and existing insurance claims under a “fast track” process so that loss reserves could be controlled and adequately maintained; and (c) Hallmark employed a specialized, experienced, and competent claims management team that effectively evaluated and estimated loss reserves.

On March 2, 2020, Hallmark announced it would be required to increase its loss reserves by $63.8 million related to insurance policies sold in 2016 and 2017. On this news, Hallmark’s stock price fell by $2.10 to close at $12.23 per share on March 3, 2020. On March 11, 2020, Hallmark terminated its independent auditor, BDO USA, LLP (“BDO”). On this news, Hallmark’s stock price fell by $2.39 to close at $5.71 per share on March 12, 2020. On March 17, 2020, BDO disclosed that its termination resulted from Hallmark’s refusal to comply with BDO’s auditing procedures. On this news, Hallmark’s stock price fell to $3.12 per share on March 18, 2020. In total, between March 2, 2020 and March 17, 2020, Hallmark’s share price plummeted over 78%.

If you currently own Hallmark common stock and are interested in discussing your rights, or have information relating to this investigation, please contact Kip Shuman toll free at (866) 569-4531 or email Mr. Shuman at kip@shumanlawfirm.com.

Shuman, Glenn & Stecker represents investors throughout the nation, concentrating its practice in stockholder litigation.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210601006054/en/

FAQ

What are the allegations against Hallmark Financial Services (HALL)?

Hallmark is facing allegations of misrepresenting its loss reserves and claims management processes as part of a securities class action lawsuit.

How much did Hallmark's stock price drop after the loss reserve announcement?

After announcing a $63.8 million increase in loss reserves, Hallmark's stock price dropped by $2.10, closing at $12.23 per share.

What happened to Hallmark's stock price after terminating its auditor?

Following the termination of its auditor BDO, Hallmark's stock price fell by $2.39, closing at $5.71 per share.

What was the total decline in Hallmark's share price during March 2020?

Hallmark's share price plummeted over 78% from March 2 to March 17, 2020.