Glancy Binkow & Goldberg LLP, Representing Investors Who Purchased CRM Holdings, Ltd., Announces Class Action Lawsuit & Seeks...
February 05 2010 - 8:51PM
Business Wire
Notice is hereby given that Glancy Binkow & Goldberg LLP has
filed a class action lawsuit in the United States District Court
for the Southern District of New York on behalf of a class
consisting of all persons or entities who purchased the securities
of CRM Holdings, Ltd. (“CRM Holdings” or the “Company”)
(NASDAQ:CRMH) between December 21, 2005 and November 5, 2008,
inclusive (the “Class Period”).
A copy of the Complaint is available from the court or from
Glancy Binkow & Goldberg LLP. Please contact us by phone to
discuss this action or to obtain a copy of the Complaint at (310)
201-9150 or Toll Free at (888) 773-9224, by email at
shareholders@glancylaw.com, or visit our website at
http://www.glancylaw.com.
The Complaint charges CRM Holdings and certain of the Company’s
executive officers and directors with violations of federal
securities laws. CRM Holdings is a provider of workers'
compensation insurance products. Its main business activities
include underwriting primary workers compensation insurance
policies, underwriting workers’ compensation reinsurance and excess
insurance policies, and providing fee-based management and other
services to self-insured entities. The Complaint alleges that
throughout the Class Period defendants knew or recklessly
disregarded that their public statements concerning CRM Holdings’
financial performance and prospects were materially false and
misleading. Specifically, defendants made false and/or misleading
statements and/or failed to disclose: (1) that Defendants and their
affiliates engaged in a fraudulent scheme and course of business to
grow membership in eight self-insured groups (the “Trusts”)
previously administered by CRM, by charging premiums below
commercial rates; (2) that the membership growth inflated gross
trust revenues while reducing net paid premium income to the level
that the assets of the Trusts would become insufficient to cover
liabilities; (3) that, accordingly, the Trusts would fall below
“fully funded” status; (4) that, as part of their fraudulent scheme
and course of business to cover up the difference between assets
and liabilities, Defendants and their affiliates disguised the true
financial conditions of the Trusts by engaging in certain
improprieties designed to result in minimal projected claims
liability, including under-reserving individual claims and
utilizing improper actuarial/accounting methods; (5) that
Defendants and their affiliates provided the New York State
Workers’ Compensation Board (WCB) with materially false and/or
misleading financial and actuarial reports for the Trusts which
reflected artificially reduced liabilities; (6) that, as a result
of the above, the Company was exposed to hundreds of millions of
dollars in liabilities relating to the under-funding of the Trusts;
(7) that the Company lacked adequate internal and financial
controls; and (8) that, as a result of the above, the Company's
financial statements were materially false and misleading at all
relevant times.
On October 3, 2008, CRM Holdings disclosed that it had received
a letter from the WCB indicating its intention to initiate legal
proceedings against the Company on behalf of the Trusts related to
CRM Holdings' actions while acting as the administrator and broker
of record for the Trusts. On this news, over the next two days of
trading, shares of CRM Holdings declined $0.61 per share, or
24.31%, to close on October 7, 2008 at $1.91 per share.
Then, on November 5, 2008, CRM Holdings reported its financial
results for the 2008 fiscal third quarter and announced that during
third quarter the Company had approximately $2.5 million of loss
reserve increases that would have otherwise been reflected in the
first and second quarter of 2008.
As a result of this news, over the following three days of
trading, CRM Holdings shares declined $0.58 per share, or more than
36%, to close on November 7, 2008, at $1.03 per share, on high
volume.
Plaintiff seeks to recover damages on behalf of class members
and is represented by Glancy Binkow & Goldberg LLP, a law firm
with significant experience in prosecuting class actions, and
substantial expertise in actions involving corporate fraud.
If you are a member of the class described above, you may move
the Court, no later than 60 days from the date of this Notice, to
serve as lead plaintiff, however, you must meet certain legal
requirements. If you wish to discuss this action or have any
questions concerning this Notice or your rights or interests with
respect to these matters, please contact Michael Goldberg, Esquire,
of Glancy Binkow & Goldberg LLP, 1801 Avenue of the Stars,
Suite 311, Los Angeles, California 90067, by telephone at (310)
201-9150 or Toll Free at (888) 773-9224, by e-mail to
shareholders@glancylaw.com, or visit our website at
http://www.glancylaw.com.
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