Our attorneys are investigating potential claims on behalf of purchasers of National General Holdings Corp. (NGHC) common stock or securities concerning whether there was a material weakness in the company’s internal controls over financial reporting as of December 31, 2015, and whether the company and certain of its executive officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
NGHC Stock Losses?
If you purchased or otherwise acquired National General Holdings shares or would like to speak privately with a securities attorney to contribute to or learn more about the investigation, visit our website or contact the securities team directly at (800) 254-9493.
Material Weaknesses in Financial Reporting, 3% Stock Drop
On March 16, 2017, after the markets closed for trading, National General Holdings announced that it will be unable to file its Annual Report for the fiscal year ended December 31, 2016 within the 15 day extension granted by the Form 12b-25 filed with Securities and Exchange Commission on March 1, 2017.
It also revealed that the company expects to disclose that, as part of its evaluation of its internal controls over financial reporting, management had determined there were material weaknesses in internal control over financial reporting as of December 31, 2015. These material weaknesses reportedly relate to the precision and sufficiency of formal documentation, including determining the completeness and accuracy of reports used in this operation of management’s review procedures as it relates to the following areas:
- investment accounting – the documentation of investment reconciliations and the documentation of the procedures for review of securities for other than temporary impairment and valuation of investments
- accounting for acquisitions – in particular the documentation related to the opening balance sheet and documentation related to the development of assumptions used in the valuation of intangibles
- accounting for income taxes – the documentation of the procedures for review of the income tax provision
- completeness and accuracy of reports used in accounting for premiums, investments, loss reserves and claims.
On this news, the company’s share price fell $0.77, or 3.21%, in intraday trading on March 17, 2017.