NEW YORK, Sept. 20, 2013 (GLOBE NEWSWIRE) -- Gardy & Notis, LLP has filed a class action lawsuit in the United States District Court for the Southern District of New York, Case No. 13-CV-05852, on behalf of Robert P. Lang, and all similarly-situated persons and entities who purchased or acquired Tower Group International, Ltd. or its predecessor company Tower Group Inc. ("Tower" or the "Company") (Nasdaq:TWGP) common stock between July 30, 2012 and August 8, 2013, inclusive (the "Class Period"). The action alleges that Tower and certain of its executive officers committed violations of the Securities Exchange Act of 1934.
Any Tower investor wishing to serve as lead plaintiff in the above lawsuit must apply to the Court no later than October 21, 2013. If you are a Tower shareholder and wish to discuss this lawsuit or have any questions concerning your rights and interests, you may contact our Firm by calling 212-905-0509, or contacting the attorneys named below.
Tower is a Bermuda-based insurance and reinsurance holding company that offers commercial, personal and specialty insurance products and services in the U.S. through its U.S. insurance subsidiaries and also offers reinsurance products globally.
The complaint alleges that during the Class Period Tower and certain controlling individuals of Tower made fraudulent material misrepresentations and omissions regarding Tower's business and operations. Among other things, the complaint alleges that defendants materially misrepresented and/or failed to disclose the following adverse facts: (i) that the Company failed to properly estimate its loss reserve provisions as required by Generally Accepted Accounting Principles, and (ii) that the Company failed to properly allocate its goodwill and certain deferred tax assets.
On August 7, 2013, Tower issued a press release announcing that it was postponing the release of its financial results for the second quarter of 2013 and its previously scheduled conference call to discuss the results, originally scheduled for August 8, 2013. In the press release, the Company stated that, "additional time is needed to review matters relating to the estimate of its loss reserves and, primarily due to the integration of the Canopius Bermuda merger, its allocation of goodwill and certain tax accounts." The Company also stated that it does not expect to file its quarterly report on Form 10-Q for the quarter ended June 30, 2013 by the required filing date of August 9, 2013. On August 8, 2013, the Company provided guidance on its second quarter 2013 results wherein it disclosed that the Company may record adverse reserve development of $60 million to $110 million pre-tax. The Company also disclosed that it had hired an independent actuarial firm to review selected areas of its loss reserves as of June 30, 2013. Following this news, the price of Tower's shares dropped $5.20 per share, or more than 24%, to a closing price of $16.41 per share on August 8, 2013. On August 9, 2013, the Company filed a Notification of Late Filing on Form 12b-25 with the United States Securities and Exchange Commission. On August 13, 2013, the rating agency A.M. Best Co. put the ratings of the subsidiaries of Tower under review with negative outlook. The negative rating action also reflects the ratings agency's concern about an anticipated prior-year loss reserve charge of approximately $60 million to $110 million pre-tax. The Company's results might suffer from reserve leverage and the increased uncertainty with respect to future reserve charges.
On September 17, 2013, Tower announced that it planned to release its second quarter 2013 financial results during the week of October 7, 2013. In the press release, Tower also reaffirmed that it is not providing and does not expect to provide any information with respect to its results for the second quarter, including the amount of any adjustments for its estimates of loss reserves and amounts of goodwill, until it releases its earnings for the second quarter during the week of October 7, 2013. As a result of this news, shares of Tower closed down nearly 30% on September 18, 2013.
Plaintiff seeks to recover damages on behalf of all purchasers of Tower common stock during the Class Period (the "Class"). The plaintiff is represented by Gardy & Notis LLP, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.