Atlas Financial Holdings, Inc. Accused of Understating Certain Loss Reserves
According to the complaint, throughout the class period, Atlas Financial Holdings, Inc. (NasdaqGM: AFH) attested to the effectiveness of the company’s financial reporting. However, Atlas failed to employ internal controls to ensure appropriate accounting practices, in turn causing the company to understate certain loss reserves. On March 1, 2018, Atlas announced a large increase to its reserves, noting disappointment in the corresponding reduction of the company’s book value. Following the announcement, on March 2, 2018, Boenning & Scattergood, Inc. downgraded the company’s shares to neutral, and Bloomberg news noted that the company’s risk of default had increased. On this news, Atlas’ stock price fell over 40% to close at $11.10 per share on March 2, 2018.
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