NEW YORK, March 07, 2019 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed
against Maiden Holdings, Ltd. (“Maiden” or the “Company”) (NASDAQ: MHLD) and certain of its officers and directors. The
class action, filed in United States District Court, District of New Jersey, and indexed under 19-cv-08105, is on behalf of a class
consisting of all persons and entities, other than Defendants and their affiliates, who purchased or otherwise acquired publicly
traded securities of, Maiden securities between March 4, 2014 and November 9, 2018 (the “Class Period”), against Maiden and
certain of the Company’s former executive officers seeking to pursue remedies under the Securities Exchange Act of 1934 (the
“Exchange Act”).
If you are a shareholder who purchased Maiden securities during the class period, you have until April 12, 2019,
to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who
inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here to join this class action]
Maiden is a Bermuda-based holding company that provides reinsurance services through its subsidiaries.
Reinsurance is the process by which one insurance company insures policies underwritten by another insurance company,
allowing that company to mitigate its risk in the event of adverse developments that may cause policy losses. The insurance
company pays premiums to the reinsurance company and, if a loss triggered under the reinsurance policy develops, the insurance
company can cede the agreed upon amount of loss to the reinsurer.
Because Maiden is a reinsurance company, the reliability of the underwriting procedures and processes it uses to
evaluate the underlying policies it reinsures are critical to the Company’s success. It is of central importance to investors
that Maiden accurately assess and disclose potential risks and liabilities related to these underlying policies and, further, that
the Company appropriately prices its reinsurance policies to account for such risks, establish adequate loss reserves, and avoid
adverse developments and unexpected losses.
Maiden has two reportable operating segments: (i) Diversified Reinsurance; and (ii) AmTrust Reinsurance.
The Diversified Reinsurance segment consists of a portfolio of predominantly property and casualty reinsurance business
focusing on regional and specialty property and casualty insurance companies. The AmTrust Reinsurance segment includes all
business ceded by AmTrust Financial Services, Inc. (“AmTrust”).
AmTrust and Maiden are closely-related entities, with Maiden noting in financial filings that it “may be deemed
an affiliate of AmTrust.” AmTrust was founded in 1998 by the brothers Michael Karfunkel (“M. Karfunkel”) and George
Karfunkel (“G. Karfunkel”). AmTrust underwrites and provides various niche property and casualty insurance products.
Similarly, Maiden was formed in 2007 by M. Karfunkel, G. Karfunkel, and M. Karfunkel’s son-in-law, Barry Zyskind
(“Zyskind”), primarily to provide reinsurance services to AmTrust. Zyskind is the current Chairman of the Board of Directors
for Maiden (the “Board”), as well as the CEO, President, and Chairman of AmTrust. Members of the Karfunkel family are also
principal stockholders of AmTrust and owned or controlled about 49% of AmTrust’s outstanding common shares as of December 31, 2016.
The complaint alleges throughout the Class Period, defendants misrepresented the quality and nature of Maiden’s underwriting and
risk management policies and practices and the risks of its reinsurance portfolio. In particular, defendants misleadingly
claimed that they were subjecting AmTrust’s insurance portfolio to robust analysis and cross-checks to ensure that the Company had
appropriately priced the risk of reinsuring AmTrust’s insurance portfolio. In truth, the Company had failed to employ
sufficient underwriting and risk management protocols and had largely abdicated its responsibility to ensure that its AmTrust
Reinsurance segment priced policies commensurate with the risk assumed by the Company. These failures subjected the Company,
and investors, to catastrophic losses. As those losses were realized, the price of Maiden stock declined precipitously.
On February 27, 2018, Maiden reported a net loss of $133.6 million and a net adverse development of $171 million stemming from the
Company’s workers’ compensation line of its AmTrust Reinsurance segment and from two accounts in its commercial auto line of
business within the Diversified Reinsurance segment.
On this news, Maiden’s stock price fell $1.20 per share, or 16%, to close at $6.00 per share on February 28, 2018.
On August 9, 2018, Maiden announced its financial results for the quarter ended June 30, 2018, revealing that it had continued to
sustain losses, suffering a net loss of $5.9 million for the quarter, and disclosing that Maiden had suffered an adverse prior year
loss development of $28.4 million in its AmTrust Reinsurance segment. The Company also revealed that its Chief Executive
Officer and Chief Financial Officer would be retiring.
On this news, the price of Maiden common stock fell $3.10 per share, or 41.3%, to close at $4.40 per share on
August 9, 2018.
Then, on November 9, 2018, Maiden announced its financial results for the quarter ended September 30, 2018, including a massive
$308.8 million net loss and a $210.4 million adverse prior year loss development in just its AmTrust segment. The Company
also revealed that the sale of Maiden's business assets had resulted in an impairment loss of $74.2 million.
On this news, the price of Maiden common stock fell $1.12 per share, or nearly 32%, to close at $2.40 per share
on November 12, 2018.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the
premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz,
known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80
years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities
fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on
behalf of class members. See www.pomerantzlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 9980
