DENVER, CO, June 1, 2021 – Shuman, Glenn & Stecker announces that it is investigating potential claims against certain officers and directors of Hallmark Financial Services, Inc. (“Hallmark” or the “Company”) (NASDAQ: HALL). Hallmark is a diversified property/casualty insurance group.
The Firm’s investigation relates to allegations raised in a securities class action against Hallmark and certain of its senior officers in the U.S. District Court for the Northern District of Texas. The lawsuit alleges that the defendants falsely stated, among other things, that: (a) Hallmark’s loss reserve amount was adequate, appropriately calculated, effectively managed, and properly maintained to account for unpaid losses associated with Hallmark’s insurance claim files; (b) Hallmark’s claims management process included aggressively closing out new and existing insurance claims under a “fast track” process so that loss reserves could be controlled and adequately maintained; and (c) Hallmark employed a specialized, experienced, and competent claims management team that effectively evaluated and estimated loss reserves.
On March 2, 2020, Hallmark announced it would be required to increase its loss reserves by $63.8 million related to insurance policies sold in 2016 and 2017. On this news, Hallmark’s stock price fell by $2.10 to close at $12.23 per share on March 3, 2020. On March 11, 2020, Hallmark terminated its independent auditor, BDO USA, LLP (“BDO”). On this news, Hallmark’s stock price fell by $2.39 to close at $5.71 per share on March 12, 2020. On March 17, 2020, BDO disclosed that its termination resulted from Hallmark’s refusal to comply with BDO’s auditing procedures. On this news, Hallmark’s stock price fell to $3.12 per share on March 18, 2020. In total, between March 2, 2020 and March 17, 2020, Hallmark’s share price plummeted over 78%.
If you currently own Hallmark common stock and are interested in discussing your rights, or have information relating to this investigation, please contact Kip Shuman toll free at (866) 569-4531 or email Mr. Shuman at firstname.lastname@example.org.