Uber Insurer Faces Securities Fraud Class Action Lawsuit

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Uber Insurer Securities Fraud Class Action Lawsuit Overview:

• Who: Investors are organizing a class action lawsuit against James River Holdings, Ltd, which owns specialty insurance companies, including Uber insurers.
• Why: James River is alleged to have made false and misleading claims about Uber insurance claims, leading to investor losses. 
• Where: James River is a Bermuda-based company.

Uber insurer, James River Group Holdings, Ltd is facing a class action lawsuit alleging the company misled investors about the financial well-being of its ride-share insurance policies. 

James River is a holding company that owns and operates a group of insurance companies. The class action lawsuit claims that James River failed to adequately manage its reserves and Uber insurer policies and subsequently made false and misleading statements when it failed to disclose its lack of reserves and unfavorable prospects. 

Uber Insurer Contract Leads to James River Securities Fraud

In 2014, under its Commercial Auto Division, James River insured Rasier LLC, a subsidiary of the ride-sharing giant Uber Technologies, Inc. In 2019, Uber comprised more than 25 percent of James River’s premiums. 

In August 2019, James River reported “unfavorable reserve development of $2.3 million,” meaning that it did not have enough funds for its policy coverage, but assured investors that it had enough reserves for its Uber policies, alleges the class action. On Oct. 8, 2019, James River issued an early cancellation of its Uber insurer policies, still assuring investors that they had nothing to worry about. 

On May 5, 2021, James River allegedly disclosed an additional $170 million of unfavorable reserves related to its Uber policies and launched a public equity offering in order to raise $175 million to cover its losses. 

Following this news, James River’s stock price allegedly dropped $12.27 per share, or 26.83 percent, leading to significant investment losses.

Did you invest in James River stock over the past few years? Did you suffer losses after the company revealed information about its Uber insurer issues? Tell us about it in the comment section below!!

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