NEW YORK, Sept. 11, 2014 (GLOBE NEWSWIRE) -- Morgan & Morgan announces that a class action lawsuit has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Genworth Financial, Inc. ("Genworth" or the "Company") (NYSE:GNW) securities between December 4, 2013 and July 29, 2014, inclusive (the "Class Period").
The class action alleges that the Company and certain of its officers and/or directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
If you purchased Genworth stock during the Class Period, you may, no later than October 20, 2014, request that the Court appoint you lead plaintiff of the proposed class. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
If you want more information about the Genworth Securities Class Action please contact Morgan & Morgan at 1-800-732-5200 or email info@morgansecuritieslaw.com
The complaint alleges that defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company's long term care ("LTC") insurance claims were increasing in number and size; (2) that Genworth would have to increase its reserves to meet these claims; and (3) that, as a result of the foregoing, the Company's statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis.
On December 4, 2013, the first day of the alleged class period, Genworth announced that it had completed a "very intensive, broad, and deep review" of the LTC business and had developed a strategy to keep the long term business profitable. On the same day, Genworth's Chief Executive Officer also assured investors that "we believe we have adequate long term care reserves with the margin for future deterioration[.]" The complaint alleges that the Company made several statements in the first half of 2014 relating to its LTC business, but failed to disclose that the number and size of claims in LTC business were increasing, which would in turn result in a corresponding increase in Genworth's claim reserves for the long term care segment.
On July 29, 2014, the Company announced disappointing LTC net operating income of $6 million for the second quarter of 2014, down from $46 million the prior quarter. As a result, Genworth announced that it planned to conduct a review of its claims reserves for this segment and may be required to increase its reserves. On this news, the Company's stock dropped $2.28 per share, or approximately 14%, from a previous closing price of $16.26 on July 28, 2014, to close at $13.98 per share on July 29, 2014.
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