SAN DIEGO & NEW YORK--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that a purchaser of National General Holdings Corp. (NASDAQ: NGHC) filed a class action complaint for alleged violations of the Securities Exchange Act of 1934 between August 6, 2015 and August 9, 2017. National General is a specialty personal lines insurance company that provides a variety of insurance products and services.
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National General Accused of Participating in Fraudulent Insurance Scheme
According to the complaint, during the relevant period, National General, in coordination with Wells Fargo, forced thousands of Wells Fargo customers to pay for auto insurance known as Collateral Protection Insurance ("CPI") that they did not need or want, defrauding the customers out of millions of dollars. National General concealed its participation in the fraudulent scheme and provided investors with misleading revenues and earnings results that had been artificially inflated due to proceeds from the scheme. Although National General and Wells Fargo knew the CPI scheme harmed its customers, it did not end until September 2016, when Wells Fargo internally recognized that the scheme "could lead to reputational risk and potential legal exposure." However, Wells Fargo still continued to pay tracking fees to National General for the CPI policies that National General had underwritten. Then, on July 27, 2017, The New York Times published an article that revealed the CPI scheme and National General's role in the scheme, leading to regulatory investigations, congressional scrutiny, and civil lawsuits. On this news, National General's stock fell 15% to close at $18.00.
National General Holdings Corp. (NGHC) Shareholders Have Legal Options
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