Shareholder Investigation of National General

National General Holdings Corp. (NGHC) Accused of Participating in Fraudulent Insurance Scheme

According to the complaint, for alleged violations of the Securities Exchange Act of 1934 between August 6, 2015 and August 9, 2017, National General Holdings Corp. (NGHC), in coordination with Wells Fargo, forced thousands of Wells Fargo customers to pay for auto insurance known as Collateral Protection Insurance (“CPI”) that they did not need or want, defrauding the customers out of millions of dollars. National General concealed its participation in the fraudulent scheme and provided investors with misleading revenues and earnings results that had been artificially inflated due to proceeds from the scheme. Although National General and Wells Fargo knew the CPI scheme harmed its customers, it did not end until September 2016, when Wells Fargo internally recognized that the scheme “could lead to reputational risk and potential legal exposure.” However, Wells Fargo still continued to pay tracking fees to National General for the CPI policies that National General had underwritten. Then, on July 27, 2017, The New York Times published an article that revealed the CPI scheme and National General’s role in the scheme, leading to regulatory investigations, congressional scrutiny, and civil lawsuits. On this news, National General’s stock fell 15% to close at $18.00.

National General Holdings Corp. (NGHC) Shareholders Have Legal Options

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