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Robbins Arroyo LLP: Citizens, Inc. (CIA) Misled Shareholders According to a Recently Filed Class ActionShareholder rights law firm Robbins Arroyo LLP announces that a class action complaint was filed against Citizens, Inc. (NYSE: CIA) in the U.S. District Court for the Western District of Texas. The complaint is brought on behalf of all purchasers of Citizens securities between March 11, 2015 and March 8, 2017, for alleged violations of the Securities Exchange Act of 1934 by Citizens' officers and directors. Citizens, through its subsidiaries, provides life insurance products in the United States and internationally. View this information on the law firm's Shareholder Rights Blog: www.robbinsarroyo.com/shareholders-rights-blog/citizens-inc Citizens Accused of Scheming to Inflate Its Share Price According to the complaint, in a series of filings with the U.S. Securities and Exchange Commission, Citizens officials emphasized the positive attributes of its international insurance business, including: (1) larger face amount policies, resulting in lower underwriting and administative costs per unit of coverage; (2) premiums paid annually, which reduces administrative expenses and accelerates cash flow; and (3) persistency experience and mortality rates that are comparable to its U.S. policies. Citizens further stated that it implemented several policies and procedures to limit the risks of asset and premium loss relating to its international business and noted that it continued to report increased sales from its top producing foreign countries. The complaint alleges that these statements were misleading because Citizens officials failed to disclose that the company falsely claimed that the funds from its insurance policies are directly invested in U.S. Treasury bonds, and that funds from the company's insurance policies are funneled into continuous open market purchases that have inflated the company's stock price. On March 8, 2017, Seeking Alpha reported that Citizens sells insurance policies to foreign retail investors and retirees that funnel millions of dollars into open market purchases of the company's shares and inflate their value. The article also asserted that Citizens sells its policies through promises of outsized "guaranteed" returns backed by U.S. Treasury bonds, even though the money is not invested in U.S. Treasuries. The article further noted that longtime company insiders have left amidst evidence of serious problems suggesting Citizens is on the brink of collapse. In particular, the company's financials show that many existing policyholders are asking to be cashed out, while decreasing policy sales and broker defections have made it more difficult for Citizens to entice new investors. On this news, the company's shares fell $0.45 per share, or over 5%, to close at $8.00 per share on March 9, 2017. Citizens Shareholders Have Legal Options Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, [email protected], or via the shareholder information form on the firm's website. Robbins Arroyo LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested. Attorney Advertising. Past results do not guarantee a similar outcome.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170323006324/en/ |
