Texas-Based Insurer Sees Recovery After Short-Seller Report Causes Stock Plunge
After enduring a significant plunge of 53% on Thursday following allegations of insurance fraud, shares of Globe Life (GL) rebounded by about 20% on Friday morning. The Texas-based insurance company faced scrutiny from Fuzzy Panda Research, a short-seller, which disclosed a short position after uncovering what it described as “extensive allegations of insurance fraud ignored by management despite being obvious and reported hundreds of times.”
Among the allegations made by the short-seller are claims that Globe Life issued insurance policies for fictitious and deceased individuals, forged signatures, and withdrew funds from bank accounts without customer consent. Additionally, it’s alleged that fake insurance policies were funded through fictitious bank accounts to ensure employees met their bonuses.
Globe Life has vehemently refuted these allegations, labeling them as “wildly misleading” and attributing them to short-term profit motives. While CNBC could not independently verify the claims made by Fuzzy Panda Research, Globe Life’s stock saw a partial recovery as investors digested the situation and awaited further developments.
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