A class action has been filed against Met Life, Inc., a New York based provider of insurance and other financial services (NYSE: MET) and certain of its officers and directors by stockholders who purchased the company’s common stock between April 5, 2000 and October 19, 2004. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company’s securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.
Specifically, the complaint alleges that during the class period MetLife failed to disclose that in order to steer business its way, the Company paid tens of millions of dollars of contingent commissions "kickbacks." In fact, on October 19, 2004, MetLife admitted that in 2003 alone, it paid $25 million in contingent commissions. In addition, MetLife also paid other fees for data processing, billing and "communication" services.
On October 14, 2004, the Attorney General of the State of New York announced that as a result of an intensive investigation, the State had commenced a civil action against the Company. After this announcement, the Company’s stock dropped 15% over two days to close at $33.98 per share.