The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on July 19, 2000, on behalf of purchasers of the securities of Frontier Insurance Group, Inc. between August 5, 1997 and April 14, 2000, inclusive.
A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss’ website at: http://www.milberg.com/frontier/.
The action is pending in the United States District Court for the Southern District of New York against defendants Frontier Insurance Group, Inc., Harry W. Rhulen (President and Chief Executive Officer as of January 29, 1998), Peter L. Rhulen (Director), Mark H. Mishler (Vice President – Treasurer and Chief Financial Officer until February 2000 when he became Executive Vice President and President of Frontier Insurance Company) and Patrick W. Kenny (Executive Vice President).
The Complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between August 5, 1997 and April 14, 2000, thereby artificially inflating the price of Frontier common stock.
For example, as alleged in the complaint, on December 4, 1997, Frontier announced that it expected to boost the scope of its medical malpractice business through the acquisition of Western Indemnity Insurance Company. In fact, as revealed on April 14, 2000, the increase in the Company’s medical malpractice business resulted from the Company’s relaxation of underwriting standards, loosening of policy terms and predatory pricing – not simply by its acquisition of Western’s medical malpractice business.
On April 14, 2000, the Company announced a revision of its previously reported 1999 results causing its stock to close at $1 per share, a decline of more than 97% from the class period high of $38.6875 per share.
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