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Kessler Topaz Meltzer & Check, LLP: Investor Class Action Filed Against James River Group Holdings, Ltd. for Securities Fraud Violations

Notice is hereby given that a class action lawsuit has been filed on behalf of those who purchased or acquired James River Group Holdings, Ltd. (“James River”) (NASDAQ: JRVR) common stock between August 1, 2019 and May 5, 2021, inclusive (the “Class Period”).
 

James River investors may receive additional information about the case by clicking the link "Submit Your Information" above.  If you are a member of the class described above, you may no later than September 7, 2021 move the Court to serve as lead plaintiff of the class, if you so choose.


James River is a holding company that owns and operates a group of specialty insurance and reinsurance companies.  Its largest segment, Excess and Surplus (“E&S”) Lines insurance, focuses on insureds that generally cannot purchase insurance from standard lines insurers due to perceived risks related to their businesses. Included in this E&S Lines segments is James River’s Commercial Auto Division.  In 2014, James River ramped up its Commercial Auto Division by underwriting a new type of insurance policy that covered Rasier LLC (“Rasier”), a subsidiary of the ride-sharing company, Uber Technologies, Inc. (together with Rasier, “Uber”).  Until that time, ride-sharing insurance had only covered claims incurred while ride-sharing drivers were transporting passengers for Uber, thus leaving a gap in coverage for accidents caused by ride-sharing drivers while they were not providing transportation services for hire but were still logged on to the Uber applications and available to accept a ride. Uber was James River’s largest contract and accounted for more than 25% of its premiums in 2019.

The Class Period commences on August 1, 2019, the day after James River issued a press release after market hours that reported “unfavorable reserve development of $2.3 million compared to unfavorable reserve development of $2.2 million in the prior year,” which included $1.2 million of unfavorable reserve development in the E&S Lines segment.  At the beginning of the Class Period, the defendants assured investors that James River was adequately reserved against its Uber policies and that the defendants were “comfortable” with James River’s E&S Lines reserves.  However, after the market closed on October 8, 2019, James River announced that it had delivered a notice of early cancellation, effective December 31, 2019, for all insurance policies issued to Uber, though James River would remain contracted to provide coverage for future claims related to the period the Uber polices were in effect.  Throughout the Class Period, the defendants repeatedly assured investors that the legacy contract posed no challenges to James River.

The truth was revealed on May 5, 2021 when James River surprised the market by disclosing an additional $170 million of unfavorable reserves related to the Uber policies. In order to cover its losses, James River announced that it was seeking to raise $175 million through a public equity offering, which was priced at “the sector’s steepest discount ever” according to Bloomberg.  

Following this news, James River’s stock price dropped $12.27 per share, or 26.83%, from a closing price of $46.50 per share on May 5, 2021 to a closing price of $34.23 per share on May 6, 2021.

The complaint alleges that throughout the Class Period, the defendants failed to disclose that: (1) James River had not adequately reserved for its Uber policies; (2) James River was using an incorrect methodology for setting reserves that materially understated its true exposure to Uber claims; (3) as a result, James River was forced to increase its unfavorable reserves in subsequent quarters even after cancelling the Uber polices; and (4) as a result, the defendants’ statements about James River’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis. 

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.

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 Kessler Topaz Meltzer & Check, LLP:  James Maro, Esq. (484) 270-1453; or toll-free at (844) 887-9500; or via e-mail at info@ktmc.com.  If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
 

Please complete this form relating to your transactions for James River Group Holdings, Ltd. (NASDAQ: JRVR) common stock between August 1, 2019 and May 5, 2021, inclusive (the “Class Period”).

You may also contact James Maro, Esq. (484) 270-1453; or toll free at (844) 887-9500; or you may submit your information via email at info@ktmc.com; or you may click here to print a PDF of this form.
 

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The submission of this form does not create an attorney-client relationship, nor an obligation on the part of Kessler Topaz or you to file a lead plaintiff motion in this matter. Any information you submit will be maintained as confidential. If Kessler Topaz, in its sole discretion, believes that you might be an appropriate lead plaintiff candidate, Kessler Topaz will contact you to discuss the matter and whether to establish an attorney client relationship. By signing this form you are authorizing us to contact you regarding this case and/or future cases.
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