A class action lawsuit has been filed in the US District Court for the Eastern District of Texas versus Globe Life for alleged violations of federal securities laws.
Filed by Bernstein Litowitz Berger & Grossmann LLP (BLB&G), the suit alleges that the life insurer, formerly known as Torchmark Corporation, and several of its current and former executives, violated laws during a period from May 8, 2019, to April 10, 2024.
The lawsuit is filed on behalf of the City of Miami General Employees’ & Sanitation Employees’ Retirement Trust. The complaint stems from an investigation by BLB&G.
The legal complaint contends that throughout the class period, Globe Life and the defendants issued several materially false and misleading statements and failed to disclose vital information regarding the company's premium revenue growth and its code of business conduct and ethics. Notably, the company attributed its revenue growth to an increase in agent count and productivity, claims now under scrutiny.
Moreover, Globe Life’s public code of conduct promised a commitment to an inclusive, safe working environment, prohibiting violence, threats, and illegal drug use. However, these standards were allegedly not upheld, contributing to an artificially inflated stock price during the class period.
The allegations came to light on April 11, 2024, when an investment research firm released a report claiming widespread insurance fraud at Globe Life since 2017. The report claimed that some subsidiaries issued policies to deceased or fictitious individuals and added policies to existing customer accounts without their consent.
Furthermore, it described a hostile work environment within Globe Life subsidiaries, including unchecked sexual harassment and drug use.
Globe Life is an insurance provider known for its low-cost life insurance products with lower payouts and operates through five wholly owned subsidiaries, including American Income Life Insurance Company (AIL), which is the largest in terms of premiums collected and the number of sales agents employed.
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