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 Central District of California. The complaint is brought on behalf of all purchasers of AmTrust securities between May 10, 2016 and February 24, 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 Implementing Ineffective Internal Controls Over Financial Reporting
According to the complaint, in a series of filings with the U.S. Securities and Exchange Commission, AmTrust officials 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. However, the complaint alleges that AmTrust officials failed to disclose that the company had ineffective assessment of the risks associated with its financial reporting, that it had an insufficient complement of corporate accounting and corporate financial reporting resources within the organization, and in turn, the company lacked effective internal controls over financial reporting.
On February 27, 2017, AmTrust revealed in a press release 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 the weaknesses had not been fully remediated “due to insufficient time to fully implement and assess the design and operating effectiveness of the related controls.” On this news, AmTrust’s stock fell $5.32 per share, or over 19%, to close at $22.34 per share on February 27, 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.