Settled: November 16, 2017
On July 31, 2017, the court preliminarily approved a $20 million settlement reached with Genworth Financial, Inc. (Genworth), a provider of insurance and wealth management services. The Firm was appointed as co-lead counsel in this securities class action on July 28, 2014.
The plaintiffs allege that Genworth issued false and misleading statements that, among other things: (1) failed to properly account for projected losses related to Genworth's Australian mortgage insurance unit (Australian MI) in accordance with Generally Accepted Accounting Principles; (2) concealed the extent of its exposure to anticipated losses and defaults; and (3) concealed known trends concerning Australian MI's increased claims and delinquencies, particularly related to the Queensland flood in 2011.
On October 3, 2014, the Amended Complaint for Violation of the Federal Securities Laws was filed alleging violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934. The named defendants in the complaint were Genworth and individual defendants Michael D. Fraizer and Martin P. Klein. On December 2, 2014, the defendants moved to dismiss the complaint, which was opposed bythe lead plaintiffs. By order entered March 25, 2015, the court denied the defendants’ motion to dismiss. However, the court, on its own, dismissed the Complaint, without prejudice. On April 17, 2015, the lead plaintiffs filed their Second Amended Class Action Complaint. On May 8, 2015, the defendants again moved to dismiss, which the lead plaintiffs opposed. By order entered June 16, 2015, the court denied the defendants’ motion to dismiss.
The parties engaged in extensive fact discovery for almost two years. During this time, the parties subpoenaed more than a dozen parties and third parties. The defendants and several third parties produced approximately 2.2 million pages of documents. The court granted the class certification on March 7, 2016.
The case is In re Genworth Financial, Inc., Securities Litigation, No. 14-cv-2392 (S.D.N.Y.). The lead plaintiffs are City of Hialeah Employees' Retirement System and New Bedford Contributory Retirement System. Labaton Sucharow represents New Bedford Contributory Retirement System. The defendant is Genworth Financial, Inc.
In November 2011, Genworth announced plans to sell up to 40 percent of its Australian MI unit in a minority-stake IPO as part of an effort to strategically rebalance the company's portfolio and capital. At the time, the company stated that it planned for the IPO to take place in 2Q'12. On February 2, 2012, Genworth announced its results for 4Q'11 and assured investors that the contemplated IPO process was proceeding according to schedule. During the class period, Genworth continued to offer assurances that the IPO was progressing as planned and that the outlook for the Australian mortgage insurance business remained strong, even when confronted with questions regarding the possibility that the IPO might be delayed.
On April 17, 2012, Genworth reported that it would, in fact, delay the IPO until early 2013. Additionally, Genworth disclosed that it projected poor loss experience in Australia, including a loss at its Australia MI unit that the company attributed to natural catastrophes in coastal areas of the Queensland region (which began more than a year prior, in December 2010), "regional economic slowdowns" and "certain groups of small business owners and self-employed borrowers." In reaction to these revelations, Genworth stock price declined $1.83 per share, or 23.77 percent, to close at $5.87 per share on April 18, 2012.
Submit Proof of Claim
If you purchased the publicly traded common stock of Genworth during the period from November 3, 2011 through April 17, 2012, inclusive, you may be entitled to receive money from the proposed settlement. To be eligible for a payment, you must submit a Claim Form by November 22, 2017 in accordance with the instructions set forth in the Notice.
Settlement Fairness Hearing
A Settlement Fairness Hearing has been scheduled for November 15, 2017 at 2:00 p.m. before the Honorable Alvin K. Hellerstein at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, Courtroom 14D, New York, NY 10007. If you have questions about the settlement, please contact Labaton Sucharow at email@example.com or 1-888-219-6877, or contact the Claims Administrator, Gilardi, at (866) 684-3701.