After the market closed on November 7, 2023, James River Group Holdings, Ltd. announced Q3 2023 financial results in which it disclosed a material weakness in its internal controls over financial reporting. The Company identified an error in the accounting for the reinstatement premium on a specialty casualty reinsurance treaty in its Excess & Surplus Lines segment.
Shares of James River Group Holdings stock dropped approximately 7% in intraday trading on November 8, 2023.
The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements and failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, it is alleged that Defendants misled investors by failing to disclose that: (1) James River lacked effective internal controls regarding the recognition of reinstatement premiums for reinsurance; (2) as a result, the Company overstated its net income; (3) the Company was reasonably likely to restate its financial results; and (4) as a result of the foregoing, Defendants positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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