A law firm is investigating a shareholder class action against QBE after shareholders approached it with concerns about its share price troubles last year.
Australian law firm Maurice Blackburn Lawyers is investigating a shareholder class action against QBE Group after the company’s share price troubles last year.
The law firm says it has been approached by shareholders concerned that QBE did not inform them quickly enough of its troubles with the North America business.
Class Actions Principal at Maurice Blackburn, Jacob Varghese, says the firm is investigating whether QBE breached its continuous disclosure obligations.
“We have been approached by shareholders concerned that QBE was less than frank and timely in informing the market of the troubles in its North American business, which were at the heart of last year’s surprise loss,” Varghese said.
“If QBE has breached its obligations or misled the market, investors that bought QBE shares in the period leading up to 9 December, 2013, paid an inflated price for those shares. Those investors will be entitled to compensation.
“Together with International Litigation Funding Partners, we are offering QBE shareholders the opportunity to register their claims and receive the support of litigation funding. If there is enough shareholder interest, it is very likely that QBE will face a class action."
QBE Group revealed net losses of AUS$280m in its full year results for 2013 on 9 December last year, mainly due to claims provisioning, intangibles, and goodwill write downs in North America.
The result announcement followed QBE’s request on Friday 6 December for the ASX to halt trading on ordinary shares to allow the insurer time to finalise its analysis of information and review by the board, predominately relating to its North American operations.
Maurice Blackburn Lawyers claims the market responded to the loss by wiping US$4bn off the market value of QBE in a day, with the stock plummeting by 22.3 per cent the day the announcement was made, closing US$3.45 down at US$12 – the biggest single day fall for QBE in the past 12 years.
It added that the stock continued to fall the following day, shedding another US$1.18. In total, QBE shares fell 30 per cent over two days.
QBE has been approached by Insurance Business for comment on the potential class action.
