Shares of Globe Life rebounded about 15% Friday morning after sinking 53% Thursday following a short seller report alleging multiple instances of insurance fraud.
Fuzzy Panda Research disclosed a short position in the Texas-based insurance company after it uncovered “extensive allegations of insurance fraud ignored by management despite being obvious and reported hundreds of times.”
The short seller claims Globe Life had insurance policies written for fictitious and deceased individuals, forged signatures and had funds withdrawn from bank accounts without customer approval. It also alleges that fictitious bank accounts were used to fund fake insurance policies so employees met their bonuses.
In a statement Thursday, Globe Life refuted the allegations and said it is “driven solely by short-term profit.”
“We reviewed the report and found it to be wildly misleading, mixing anonymous allegations with recycled points pushed by plaintiff law firms to coerce Globe Life into settlements,” the company said.
CNBC could not independently verify the report’s allegations.
Globe Life specializes in life and supplemental health insurance for the middle-income market. It has more than 17 million policies in force, according to the company.
Sumber: www.cnbc.com
