Lawsuit: Misdirected Investor Sues Atlas Financial Holdings After Stock Drop

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A proposed class action has been filed against Atlas Financial Holdings, Inc. and two executives over claims that the defendants misled investors concerning the company’s accounting practices and financial reporting. According to the suit, the defendants led stockholders to believe that Atlas – a specialty insurance provider for transport businesses – was growing and performing well. In March 2018, however, the company allegedly announced it would be increasing its loss reserves due to “materially weak” accounting practices that failed to accurately predict and cover insurance claims. After this announcement, one analyst “downgraded the Company’s shares to neutral,” the suit attests, and Bloomberg News supposedly reported that Atlas’ “risk of default had increased,” causing stock prices to fall by over 40 percent.