The Kehoe Law Firm, P.C. is investigating potential claims on behalf of purchasers of AmTrust Financial Services, Inc. common stock or securities who allege that the company’s share were inflated as a result of accounting errors and material weaknesses in internal controls over financial reporting, and whether AmTrust and certain of its executive officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Material Weaknesses In Internal Controls
On February 27, 2017, AmTrust disclosed that it had “identified material weaknesses in its internal control over financial reporting that existed as of December 31, 2016, specifically related to ineffective assessment of the risks associated with the financial reporting, and an insufficient complement of corporate accounting and corporate financial reporting resources within the organization.”
On this news, AmTrust’s share price fell $5.32, or 19.23%, to close at $22.34 on February 27, 2017.
AmTrust to Restate Prior Financial Results
On March 16, 2017, AmTrust announced that it needed additional time to complete the consolidated financial statements and assessment of internal controls over financial reporting for the fiscal year ended December 31, 2016. It also revealed that, in connection with the preparation and audit of the financial statements, the Audit Committee of the AmTrust Board of Directors, concluded that the company’s previously issued consolidated financial statements for 2014 and 2015 (including for each of the four quarters of 2015) as well as for the first three quarters of 2016 should be restated and should no longer be relied upon.
In addition, AmTrust reported that the certain of the company’s earnings and press releases, and related communications, to the extent that they relate to periods covered by the upcoming restatement, as well as the company’s fourth quarter and fiscal 2016 earnings release dated February 27, 2017, should no longer be relied upon. Additionally, AmTrust cautioned that the reports of BDO USA LLP, the company’s former independent auditor, on the company’s consolidated financial statements for 2014 and 2015, including its opinions on the effectiveness of internal control over financial reporting for such periods, likewise should no longer be relied upon.
On this news, AmTrust’s share price fell $4.03, or 18.65%, to close at $17.58 on March 17, 2017.
If you purchased or otherwise acquired AmTrust shares between January 1, 2014 and March 16, 2017, or would like to speak privately with a securities attorney to contribute to or learn more about the investigation, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; or send an e-mail to [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.