Globe Life shareholder derivative lawsuit overview:
- Who: Jui Cheng Hsiao filed a shareholder derivative lawsuit against the executives and directors of Globe Life Inc.
- Why: Hsiao claims Globe Life ignored a workplace culture of sexual harassment and reported artificially inflated profitability metrics for a period of at least four years.
- Where: The shareholder derivative lawsuit was filed in Texas federal court.
A new shareholder derivative lawsuit argues that the executives and directors of insurance holding company Globe Life Inc. ignored a workplace culture of sexual harassment and consistently reported artificially inflated profitability metrics for at least four years.
Plaintiff Jui Cheng Hsiao claims Globe Life’s largest subsidiary American Income Life Insurance Company (AILIC) engaged in widespread insurance and recruiting fraud, causing the reported profitability metrics to be inflated over the four year period.
“Instead of disclosing these issues, the (named Globe Life executives and directors) attributed the Company’s financial success to increased agent count, policy persistency, and high sales,” the Globe Life lawsuit says.
Hsiao argues that, during this time, AILIC was also “knowingly providing or ignoring unsafe working environments for its female employees.”
Individual defendants include co-CEOs Frank M. Svoboda and James Matthew Darden, former CEOs Gary L. Coleman and Larry M. Hutchinson, Chief Financial Officer Thomas P. Kalmbach, Chief Accounting Officer M. Shane Henrie and several company directors.
Report reveals Globe Life management ignored ‘extensive allegations of insurance fraud,” suit says
Hsiao claims the truth of the alleged misconduct came out in a report published by Fuzzy Panda Research in April 2024, which alleged to have uncovered “extensive allegations of insurance fraud ignored by management despite being obvious and reported hundreds of times.”
“The report detailed that AILIC appeared to be an illegal pyramid scheme making it more profitable for insurance agents to recruit new agents than to sell insurance policies,” the Globe Life lawsuit says.
Furthermore, the report described “unsafe working environments” that it said were allegedly permitted and, in some cases, perpetrated by company management, leading to cases of sexual assault and sexual harassment of subordinate employees.
Hsiao argues Globe Life’s stock price lost around 53% in value in the wake of the Fuzzy Panda Research report, while closing at $49.17 per share on April 11, 2024.
The shareholder derivative lawsuit argues the reports also precipitated the filing of a securities class action lawsuit against Globe Life.
The plaintiff demands a jury trial and requests declaratory and injunctive relief, an award of restitution for Globe Life and directions and proposals to strengthen, reform and improve various aspects of the business.
Last month, Fidelity Investments confirmed it suffered a data breach in August that the company said exposed the personal information of more than 77,000 of its customers.
Were you injured when Globe Life’s stock price fell following the Fuzzy Panda Research report? Let us know in the comments.
The plaintiff is represented by Stuart L. Cochran of Condon Tobin Sladek Thornton Nerenberg PLLC, Phillip Kim and Erica Stone of The Rosen Law Firm PA and Benjamin I. Sachs-Michaels, Robert V. Prongay and Pavithra Rajesh of Glancy Prongay & Murray LLP.
The Globe Life shareholder derivative lawsuit is Hsiao v. Globe Life Inc. f/k/a Torchmark Corporation, et al., Case No. 4:24-cv-00993, in the U.S. District Court for the Eastern District of Texas.
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5 thoughts onGlobe Life lawsuit alleges sexual harassment and fraud
AIL is actively stealing from everyone that is contracted with them.
They charge double for theyre group benefits, then back pay the payment towards debt instead of cashflowing accounts accordingly.
This is just one of the various accounting violations they do to steal from theyre agents.
Noone is safe, AO is the worst
AIL is actively stealing from everyone that is contracted with them.
They charge double for theyre group benefits, then back pay the payment towards debt instead of cashflowing accounts accordingly.
This is just one of the various accounting violations they do to steal from theyre agents.
Noone is safe, AO is the worst
Never been notified
I’ve myself in the past was munipulated by the insurance company from age 18 being talked to into about the insurance.had issues with the insurance in the past including removing a person it’d as a beneficiary.
Never knew this to be true about global life