Stockholders v Manulife Financial Corporation
Stockholders File Lawsuit Against Manulife Financial Corporation
According to a press release dated July 10, 2009, the complaint alleges that Manulife made false and misleading statements regarding its ability to manage and control risk. In fact, contrary to the Company's own risk management strategy, Manulife applied no material hedging strategy to manage risk particularly during an economic downturn. The complaint further alleges that notwithstanding its risk management strategy Manulife built up a massive stock portfolio, which it chose to leave unhedged. This resulted in a huge decline in the funds available to guaranty the Separate Fund Contract obligations, forcing the Company to raise billions in capital to make up for a widening shortfall in the amount it had promised to pay customers decades from now.
On June 19, 2009, after the market closed, Manulife announced that it received an enforcement notice from the Ontario Securities Commission ("OSC") relating to Manulife's disclosure of risks concerning its variable annuity guarantee and segregated funds business. The OSC notice stated that Manulife failed to meet its continuous disclosure obligations related to its exposure to market price risk in its variable annuity guarantee and Segregated Fund Contracts business. Segregated Fund Contracts are insurance contracts also known as individual variable annuities that offer death benefits and maturity guarantees.
Stunned investors responded to the OSC's announcement when trading markets reopened on June 22, 2009. The Company's shares dropped 12% to close at $17.67 on an unusually high trading volume of almost 8 million shares.
If you bought Manulife Financial Corporation securities and would like to obtain information about the Manulife Financial Corporation lawsuit, then you are invited to call Kahn Swick Foti, LLC toll free at (866) 467-1400 to speak with an attorney or visit www.ksfcounsel.com.
