NEW YORK, Aug. 16, 2013 (GLOBE NEWSWIRE) -- Gardy & Notis, LLP has been retained to file a class action lawsuit on behalf of shareholders who purchased Tower Group International, Ltd. ("Tower Group" or the "Company") common stock between March 1, 2011 and August 7, 2013 (the "Class Period"). The action will assert claims that Tower Group and certain of its executive officers committed violations of the Securities Exchange Act of 1934.
Tower Group 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 investigation concerns whether Tower Group and certain of its executive officers made fraudulent material misrepresentations and omissions regarding Tower Group's business and operations. Among other things, the complaint will allege 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 ("GAAP"), and (ii) failed to properly allocate its goodwill and certain deferred tax assets.
On August 7, 2013, Tower Group 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 9, 2013, the Company filed a Notification of Late Filing on Form 12b-25 with the United States Securities and Exchange Commission. Following this news, the price of Tower Group 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 13, 2013, the rating agency A.M. Best Co. put the ratings of the subsidiaries of Tower Group 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.
In the complaint, the plaintiff will seek to recover damages on behalf of all purchasers of Tower Group common stock during the Class Period. The plaintiff will be represented by Gardy & Notis, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
If you purchased or acquired Tower Group securities from March 1, 2011 through August 7, 2013, and you wish to join in the lawsuit and be a plaintiff on the initial complaint, or if you wish to discuss this action or have any questions concerning this notice, please contact Mark Gardy, Meagan Farmer or Jonathan Adler at 212-905-0509. Gardy & Notis also encourages anyone with information regarding Tower Group's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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