Globe Life (GL) Embroiled in Fraud Allegations, DOJ Probe, and Investor Lawsuit - Hagens Berman

Wednesday, June 19, 2024 at 12:34am UTC

SAN FRANCISCO, June 18, 2024 (GLOBE NEWSWIRE) -- Hagens Berman urges Globe Life Inc. (NYSE: GL) investors who suffered substantial losses to act now by submitting your losses here.

Class Period: May 8, 2019 – April 10, 2024
Lead Plaintiff Deadline: July 1, 2024
Contact An Attorney Now: Phone: 844-916-0895

Globe Life Inc. (GL) Securities Class Action and Activist Short Sellers’ Investigative Reports:

McKinney, Texas-based insurance giant Globe Life is facing a multi-pronged crisis, grappling with explosive allegations of fraud at its American Income Life (AIL) subsidiary, a federal investigation, and a new securities class action lawsuit.

The lawsuit, filed on behalf of investors, alleges that Globe Life made misleading statements and failed to disclose crucial information concerning potential widespread insurance fraud at AIL and a pervasive culture of sexual harassment.

The fraud began to emerge on Apr. 11, 2024, when short-seller Fuzzy Panda Research issued a scathing report accusing AIL of rampant fraudulent practices. The report, based on interviews with former executives and agents, outlined concerning misconduct:

  • Issuing policies for deceased or fictitious individuals to inflate business metrics.
  • Forging signatures on policy documents, compromising operational integrity.
  • Unauthorized withdrawals from customer bank accounts.
  • Generating fake policies using fictitious accounts to meet performance targets.

Fuzzy Panda further implicated AIL leadership, alleging fraudulent practices escalated under CEO Steve Greer (appointed 2017) and President Dave Zophin (joined in 2018). Their interviews suggest AIL sales teams wrote over $200 million in fraudulent annual life insurance premiums.

The report also unearthed a potential $43 million bribery and kickback scheme orchestrated by Globe Life executives. The alleged scheme involved concealing ownership of an insurance licensing testing vendor (Xcel Testing) and directing recruits to use their services for licensing exams.

These allegations triggered a significant stock price plunge, with Globe Life shares dropping $55.76 (roughly 53%) on April 11.

Further complicating matters, the company disclosed a Department of Justice (DOJ) probe into AIL's business practices, specifically sales tactics used by agents, in late April. Subpoenas were reportedly issued in late 2023, raising concerns about potential wrongdoing.

Adding to the turmoil, another short-seller, Viceroy Research, commenced a ten-part investigative report series targeting Globe Life on April 30. The initial report detailed:

  • Extensive background checks on AIL’s top-performing agents revealing allegations of kidnapping, assault, and child grooming.
  • A high number of fraud accusations against AIL and its agents, often surfacing in wrongful termination or sexual harassment/assault claims.
  • How AIL’s operational methods impact churn rate, structural cash flow issues, employee misclassification risks, and the use of offshore captive reinsurers for potential liquidity against impaired assets.

“We’re looking into whether Globe Life may have concealed widespread fraudulent business practices at AIL,” said Reed Kathrein, the Hagens Berman partner leading the investigation.

If you invested in Globe Life and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »

If you’d like more information and answers to frequently asked questions about the Globe Life investigation, read more »

About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation law firm focusing on corporate accountability through class-action law. The firm is home to a robust securities litigation practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and fraud. More about the firm and its successes can be found at Follow the firm for updates and news at @ClassActionLaw

Reed Kathrein, 844-916-0895

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