In a statement, SEC Fort Worth Regional Office Director David Peavler said, “Disclosures regarding an insurance company’s loss reserve process allow investors to judge the reliability of the company’s numbers. As we allege, AmTrust never disclosed that Pipoly repeatedly deviated from the reserving processes described in the company’s filings, and changed the company’s actuarially determined reserves estimates.”
The SEC filed its case against the defendants in the federal court in the Southern District of New York.
Details of the settlement with the SEC
The defendants agreed to settle the Commission’s allegations without admitting or denying wrongdoing. AmTrust and Pipoly agreed to pay penalties of $10.3 million and $75,000, respectively. They also agreed to stop future violations of the federal securities laws. Settlements are subject to court approval.
In addition, Pipoly agreed to disgorge $140,000 and $22,400 in prejudgment interest.
