Kaskela Law LLC is investigating Hallmark Financial Services, Inc. (“Hallmark” or the “Company”) (NASDAQ: HALL) on behalf of the Company’s stockholders.
Hallmark is a diversified property/casualty insurance group. The Company is required by relevant accounting rules to estimate future amounts it may have to pay to settle claims made against insurance policies, recognizing these amounts as a current-period expense and as a “loss reserve” liability on its balance sheet.
Recently an amended shareholder securities fraud complaint was filed against Hallmark and certain executive officers on behalf of investors who purchased shares of Hallmark’s common stock between March 5, 2019 and March 17, 2020. According to the complaint, during that time period, although publicly representing that the Company’s loss reserve process was sufficient and accurate, Hallmark (i) was deliberately and systematically manipulated and understated loss reserves in order to overstate its reported net income and (ii) lacked effective internal accounting controls to prevent such manipulation.
The complaint further alleges that, during March 2020, shares of Hallmark’s common stock declined more than 78% in value after the Company issued a series of negative disclosures concerning its loss reserves.
The firm’s investigation seeks to determine whether the members of Hallmark’s board of directors breached their fiduciary duties to the Company and its stockholders in connection with the above alleged misconduct.
Current Hallmark stockholders who purchased or acquired shares of Hallmark’s common stock prior to March 5, 2019 are encouraged to contact Kaskela Law LLC (D. Seamus Kaskela, Esq.) at (484) 258 – 1585, or by completing the information form on this page, to receive additional information about this investigation and their legal rights and options.