Ohio Attorney General Jim Petro late yesterday filed a motion in federal court in New York requesting the State Teachers Retirement System of Ohio (STRS) be appointed lead plaintiff in a securities class action lawsuit filed in August against Scottish Re Group Ltd.
The reinsurance company’s disclosures of serious accounting problems in July precipitated an immediate 75 percent decline in the company’s stock price and caused STRS to suffer losses of more than $16 million, Petro said in papers filed with the U.S. District Court for the Southern District of New York.
“We intend to hold Scottish Re accountable for these losses,” Petro said. “We will aggressively pursue recovery for STRS and other purchasers of Scottish Re’s securities during the class period, just as we have against other corporations whose fraud has harmed investors.”
The company’s July disclosures had to do with tax credits that had previously boosted the company’s financial results that were now being reversed, as well as previously reported revenues that had to be reversed and expenses that had not been included in the company’s financial results.
Scottish Re, a holding company based in the Cayman Islands and Bermuda, reinsures more than 13.5 million lives in North America, making it one of the three largest reinsurers of life insurance policies sold in the country. Insurance companies buy reinsurance to reduce their risks associated with underwritten policies.
According to the written statement issued by the attorney general’s office, Petro’s action continues his policy of aggressively pursuing recovery of investment losses sustained by Ohio pension funds in recent years following a number of accounting and corporate governance breakdowns that have harmed the capital markets.
Source: Ohio Attorney General’s Office
Was this article valuable?
Here are more articles you may enjoy.