A class action lawsuit was filed against Globe Life Inc. (NYSE:GL) Torchmark Corporation on April 30, 2024. The plaintiffs (shareholders) alleged that they bought Globe Life stock at artificially inflated prices between May 8, 2019 and April 10, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought GL stock during that period can click here to learn about joining the lawsuit.
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Globe Life is an American financial holding company that operates insurance businesses through several of its subsidiaries. It boasts to be one of the largest insurance companies in the world, with over 17 million policies and over $227 billion of coverage in force.
The plaintiffs maintain that Globe Life and six of its current and/or former senior officers deceived investors by lying and withholding vital information about the company’s business practices and certain violations of its Code of Conduct from SEC filings and related material during the Class Period.
The truth became clear on April 11, 2024, when a report by short seller Fuzzy Panda Research noted that Globe Life and its “subsidiaries had engaged in widespread insurance fraud by adding policies to existing users’ account without their consent, as well as underwriting policies for dead and fictitious people.” Moreover, the report alleged that Globe Life’s workplace environment was marred by “sexual harassment, drug use, and sexual assault.”
Interestingly, during the Class Period, Globe Life stated that it has a Code of Conduct that every employee, contractor, officer, and director “must” adhere to. Also, in its annual report filed in February 2023, the company noted that its life net sales increased owing to enhanced productivity.
As per the class action lawsuit, Globe Life caused GL stock to trade at artificially inflated prices by knowingly and recklessly misleading investors about the company’s business practices during the Class Period.
Notably, GL stock plunged 53% on April 11, causing massive damage to shareholders’ returns.
