Robbins LLP: AmTrust Financial Services, Inc. (AFSI) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that a class action complaint was filed against AmTrust Financial Services, Inc. (NASDAQGS: AFSI) in the U.S. District Court for the Southern District of New York. The complaint is brought on behalf of all purchasers of AmTrust securities between March 2, 2015 and March 16, 2017, for alleged violations of the Securities Exchange Act of 1934 by AmTrust’s officers and directors. AmTrust, through its subsidiaries, underwrites and provides property and casualty insurance in the United States and internationally.
AmTrust Accused of Improperly Recognizing Revenue and Bonuses
According to the complaint, in a series of filings with the U.S. Securities and Exchange Commission, AmTrust officials falsely attested to the accuracy of the financial statements, the disclosure of any material changes to the company’s internal controls over financial reporting, and the disclosure of all fraud. In particular, the complaint alleges that AmTrust officials failed to disclose that AmTrust: (1) had ineffective assessment of the risks associated with its financial reporting; (2) had an insufficient complement of corporate accounting and corporate financial reporting resources within the organization; (3) did not appropriately recognize its warranty contract revenue; (4) did not recognize expensed bonuses in the appropriate year; and (5) failed to maintain effective internal controls over financial reporting.
On February 27, 2017, AmTrust revealed that it had identified material weaknesses in its internal control over financial reporting that existed as of December 31, 2016. The company further disclosed that the weaknesses were related to ineffective assessment of the risks associated with the financial reporting and an insufficient complement of corporate accounting and corporate financial reporting resources. AmTrust also stated that it would correct certain financial statements for fiscal years ended December 31, 2015 and 2014, and certain financial information for fiscal years ended December 31, 2013 and 2012. Then, on March 16, 2017, the company announced that its previously issued financial statements for 2014, 2015, and 2016 should no longer be relied upon due to errors related to revenue recognition and the accrual of bonuses. On this news, AmTrust’s stock fell nearly 19% to close at $17.58 per share on March 17, 2017.
AmTrust Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.