Globe Life Under Fire: DOJ Probe and Short-Seller Cast Shadow on Insurer - Hagens Berman

/EIN News/ -- SAN FRANCISCO, April 26, 2024 (GLOBE NEWSWIRE) -- Hagens Berman urges Globe Life Inc. (NYSE: GL) investors who suffered substantial losses to act now by submitting your losses here.

Website: www.hbsslaw.com/investor-fraud/gl
Contact An Attorney Now: GL@hbsslaw.com Phone: 844-916-0895

Globe Life Inc. (GL) Investigation:

Embattled insurance giant Globe Life faces a double whammy: a federal investigation and explosive accusations of fraud.

On Apr. 23, the company revealed that the Department of Justice (DOJ) is probing Globe Life's business practices, particularly sales tactics used by agents selling policies for its largest subsidiary, American Income Life (AIL). The company received subpoenas in late 2023, raising questions about potential wrongdoing.

While Globe Life claims full cooperation, the uncertainty surrounding the investigation hangs heavy. Co-CEO Frank Svoboda admitted the company cannot dismiss the possibility of legal action to follow.

Adding fuel to the fire, activist short-seller Fuzzy Panda Research dropped a bombshell report on Apr. 11, accusing Globe Life of rampant insurance fraud. The Fuzzy Panda report, which relied on interviews with former executives and agents paints a troubling picture of misconduct within AIL. Among the allegations leveled against AIL are:

Policies for the Deceased and Fictitious Individuals: AIL allegedly wrote insurance policies for deceased and fictitious people, artificially inflating their business metrics.

Forged Signatures: The company is accused of forging signatures on policy documents, undermining the integrity of its operations.

Unauthorized Fund Withdrawals: AIL allegedly withdrew funds from consumers’ bank accounts without proper authorization, leaving policyholders financially vulnerable.

Fictitious Bank Accounts: Agents purportedly used fictitious bank accounts to create fake policies, ensuring they met performance targets and received bonuses.

Executives Potentially Implicated: The report points fingers at AIL’s leadership. According to Fuzzy Panda, fraudulent practices became pervasive after Steve Greer became AIL’s chief executive in 2017 and Dave Zophin became its president the following year.

Staggering Financial Impact: Fuzzy Panda’s interviews with former executives and sales agents suggest that over $200 million in fraudulent annual life insurance premiums (ALP) were written by AIL sales teams. The fallout from these revelations has been swift, with Globe Life’s stock price plummeting and investors left grappling with substantial losses.

Bribery and Kickback Scheme: In a further twist, Fuzzy Panda alleges that Globe Life executives orchestrated a $43 million bribery and kickback scheme to make money from the company’s own recruits. The scheme allegedly involved executives’ concealing their ownership of an insurance license testing vendor (Xcel Testing) while directing recruits to Xcel to prepare for their licensing exam.

The combined weight of the DOJ probe and the Fuzzy Panda report sent Globe Life's stock price into a tailspin, plummeting over 50% this month.

“We are investigating the propriety of Globe Life’s business practices,” said Reed Kathrein, the Hagens Berman partner leading the investigation.

If you invested in Globe Life and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »

If you’d like more information and answers to frequently asked questions about the Globe Life investigation, read more »

Whistleblowers: Persons with non-public information regarding Globe Life should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email GL@hbsslaw.com.

About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation law firm focusing on corporate accountability through class-action law. The firm is home to a robust securities litigation practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and fraud. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

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Contact:
Reed Kathrein, 844-916-0895