The Class: Robbins LLP reminds investors that a shareholder filed a class action on behalf of all persons who acquired shares of Argo Group International Holdings, Ltd. (NYSE: ARGO) securities between February 13, 2018 and August 9, 2022, for violations of the Securities Exchange Act of 1934.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Argo. Shareholders who want to be appointed lead plaintiff for the class must file their papers by December 20, 2022. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
What is this Case About: Argo Group International Holdings, Ltd. (ARGO) Misled Investors Regarding its Growth and Business Prospects
According to the complaint, Argo underwrites international specialty insurance products in the property and casualty markets. In the U.S., Argo purports to be a leader in the Excess and Surplus lines focusing on risks that the standard market is unwilling or unable to underwrite. During the class period, defendants assured investors they had closely monitored Argo's policies and could set appropriate reserves. However, in reality, Argos reserves were inadequate and its underwriting standards were not as prudent as represented. In fact, Argo had dramatically changed it underwriting policies on certain U.S. construction contracts, which were underwritten outside of the Company's "core" business and for certain exposures that were riskier than investors understood and that the Company would no longer service going forward.
In February 2022, Argo announced its results for the fourth quarter of 2021 would be negatively impacted by $130 to $140 million worth of adverse prior year reserve and non-operating charges. On this news, the Company's shares fell $9.02 per share, or 17.5%, over two days to close at $42.82 per share on February 10, 2022.
Then, in August 2022, Argo announced it had entered into a Loss Portfolio Transfer agreement with a wholly owned subsidiary of Enstar Group Limited to cover the majority of its U.S. casualty insurance reserves, including construction relating to accident years 2011 to 2019. Argo would retain a loss corridor of $75 million up to $821 million and anticipated recognizing an after-tax charge of approximately $100 million in the third quarter of 2022. On this news, analysts downgraded the stock and shareholders sold, resulting in a decline of $9.12 per share, or 28%. Argo's stock closed at $23.10 per share on August 10, 2022. Argo's stock is down more than 60% this year, trading near its 52-week low.
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