Shareholder rights law firm Robbins LLP announces that a class action has been filed on behalf of all purchasers of James River Group Holdings, Ltd. (NASDAQ: JRVR) between August 1, 2019 and May 5, 2021, for violations of the Securities Exchange Act of 1934. James River owns and operates a group of specialty insurance and reinsurance companies.
If you suffered a loss due to James River Group Holdings, Ltd.'s misconduct, click here.
James River Group Holdings, Ltd. (JRVR) Misled the Investing Public Regarding the Impact of Uber on the Company's Reserves
According to the complaint, in 2014, James River entered into a novel agreement with Uber Technologies, Inc. to provide coverage for drivers while they were not providing transportation services for hire but were still logged on to their Uber application and available to accept a ride. Uber became James River's largest contract, accounting for more than 25% of the Company's premiums in 2019. Defendants assured investors that the Company was adequately reserved against its Uber policies. However, on October 8, 2019, claiming lack of profitability, James River announced 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 polices were in effect. On this news, the Company's stock price declined $11.06 per share, or over 22%, on October 9, 2019.
Throughout the relevant period, defendants assured investors that James River's issues with Uber were in the past and the Company had adequately reserved. Notably, in April 2020, the Company claimed it had been "[f]reed of the burden of the large commercial auto account … that had come to so heavily influence our results," and that the Company "did not experience any material reserve development in our Commercial Auto line." Notwithstanding, on May 5, 2021, James Rivers disclosed an additional $170 million of unfavorable reserves related to the Uber policies. In order to cover its losses, the Company announced 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, the Company's price dropped $12.27 per share, or over 26%, to close at $34.23 per share on May 6, 2021.
If you purchased shares of James River Group Holdings, Ltd. (JRVR) between August 1, 2019 and May 5, 2021, you have until September 7, 2021, to ask the court to appoint you lead plaintiff for the class.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
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