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PRU.US
id: 1102

Prudential Financial (PRU) Investor Settlement

The settlement funds have been distributed to claimants.
$35,000,000
Cash Settlement
D. New Jersey
Court
2:19-cv-20839
Case number
06/05/2019
Class period Start
08/02/2019
Class period End
07/30/2024
Claim deadline
Prudential Financial (PRU) agreed to settle $35M with shareholders to end claims for overstating reserves sufficiency in life policy business.

Case Details:

Prudential announced disappointing Q2 2019 financial results on July 31, 2019.
  • The company disclosed a pre-tax charge of $208M due to a market experience update.
  • CEO attributed the negative impact on results to changes in "mortality assumptions".
On August 1, 2019, Prudential disclosed new mortality assumptions, causing a $25M quarterly earnings loss, erasing a third of Individual Life segment's earnings.

On this news, $PRU dropped by 10% the same day.

Then, on August 2, 2019, Prudential's quarterly report to the SEC revealed that the $208M charge was solely for the Individual Life segment.

$PRU dropped 5.6% on August 2, 2019, following the announcement.

Based on these events, Prudential was accused of the following details:
  • They failed to disclose adverse mortality experience in the Individual Life segment.
  • Reported reserves were insufficient, leading to understated liabilities and inflated net income.
Prudential has now decided to end all the allegations related to the Individual Life segment issues and pay a $35M settlement.
Case Type
US Securities Class Action
Case Status
Disbursed
Alleged Offence
Mismanagement, 
Misleading Statements, 
Omissions
Suspected Party
Directors, 
Management
Security Type
Stocks
Trade Direction
Long
Payout per Share
1.57
Filing date
11/27/2019
Plaintiffs
City of Warren Police and Fire Retirement System
Attorneys
Cohn Lifland Pearlman Herrmann & Knopf LLP (Saddle Brook, NJ), Robbins Geller Rudman & Dowd LLP (San Francisco, CA), Seeger Weiss LLP (Ridgefield Park, NJ), VanOverbeke Michaud & Timmony, P.C. (Detroit, MI)
Defendants
Charles F. Lowrey, Kenneth Y. Tanji, Robert M. Falzon
Judge
Stanley R. Chesler
Administrator
Gilardi & Co LLC
Settlement agreement date
2024-02-12
Court hearing date
06/13/2024
Exclusion deadline
05/23/2024
Objection deadline
05/23/2024
Hearing deadline
05/23/2024
Trades matching type
FIFO

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