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ALL.US

id: 803

Allstate Corporation (ALL) $90M Shareholder Settlement

The settlement funds have been distributed to claimants.

$90,000,000

Cash Settlement

N.D. Illinois

Court

1:16-cv-10510

Case number

10/29/2014

Class period Start

08/03/2015

Class period End

02/08/2024

Claim deadline

Allstate $ALL agreed to settle $90 million with shareholders over claims of misleading about the spike in its auto insurance business. 

The lawsuit came after Allstate reported unexpectedly high claims payouts from auto accidents, causing a larger-than-expected decline in quarterly operating profit.
On August 3, 2015, Allstate reported disappointing Q2 2015 financial performance. The company revealed that it had experienced a third consecutive quarter of increased frequency in auto insurance claims, leading to a significant 57% decrease in operating income. Moreover, the operating earnings per share fell short of the analysts' consensus estimate. 
Subsequent to the release, the CEO of Allstate explained that the decline in quarterly profit was primarily attributed to a decline in auto insurance margins. The CEO elaborated that the decrease in auto insurance margins was a result of higher claim frequency and severity, which outweighed the average increases in auto insurance prices.
As a consequence of these revelations, $ALL experienced a sharp and rapid decline, damaging shareholders.

On November 10, 2023, shareholders filed an initial complaint alleging the Company and its certain leaders issued false and misleading statements and/or failed to disclose adverse information regarding the Company's business and prospects, including that the reason for the sudden spike in its auto claims frequency, which they claimed was due to external events beyond the Company's control, including the weather and increased miles driven, was actually the result of Allstate's growth in its auto policy business through higher risk drivers.

Case Type

US Securities Class Action

Case Status

Disbursed

Alleged Offence

Misleading Statements,

Failure to Disclose,

Omissions

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Payout per Share

0.66

Filing date

11/10/2016

Plaintiffs

Carpenters Pension Trust Fund for Northern California, Carpenters Annuity Trust Fund for Northern California, City of Providence

Attorneys

Labaton Sucharow LLP, Pomerantz LLP, Thornton Law Firm

Defendants

Thomas J. Wilson, Matthew E. Winter

Judge

Hon. Robert W. Gettleman

Administrator

A.B. Data Ltd

Settlement agreement date

2023-08-14

Court hearing date

12/19/2023

Exclusion deadline

11/28/2023

Objection deadline

11/28/2023

Hearing deadline

11/28/2023

Trades matching type

FIFO

Disbursement date

03/19/2025

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