Judge appoints Robbins Geller in securities class action against National General

SANTA ANA -- Robbins Geller Rudman & Dowd LLP is now lead counsel in a new securities class action against National General Holdings Corp. over its fraudulent insurance plot with Wells Fargo & Co., under an order Monday from U.S. District Judge Andrew J. Guilford.

National General's attorneys at Quinn Emanuel Urquhart & Sullivan, LLP didn't oppose that appointment or the appointment of a Florida city's police and firefighter pension plan as lead plaintiff in the potentially multi-million dollar case. The case seeks class certification for purchasers of National General stock between Aug. 6, 2015 and Aug. 9, 2017, which is when the insurance giant worked with Wells Fargo in what Wells admitted in other litigation was a years-long kickback scheme that saddled customers with unwanted car insurance policies.

Both companies settled multi-district litigation in August for $390 million. In Re Wells Fargo Collateral Protection Insurance Litigation, 17-ML02797 (C.D. Cal., filed Oct. 18, 2017).

But according to the new class action, other consumers suffered different harm. Anyone who bought National General stock when the scheme was in place did so at artificially inflated prices then lost big when it blew open, the complaint claims. The lawsuit also names as defendants CEO Barry Karfunkel and Chief Financial Officer Michael Weiner. City of North Miami Beach Police Officers' and Firefighters' Retirement Plan v. National General Holdings Corp. et al., 19CV-06468 (C.D. Cal., filed July 25, 2019).

"Between July 26, 2017, before the story broke, and August 10, 2017, after the launch of a congressional inquiry into the scandal, the price of National General common stock fell more than 15%," according to the 35-page complaint, filed by Robbins partners David C. Walton and Brian E. Cochran.

The lead plaintiff is the City of North Miami Beach Police Officers' and Firefighters' Retirement Plan, which lost $233,774.16. Guilford's order called the entity "not only the only candidate for the position at this time but also a prime candidate to represent the class."

Still pending is a defense motion to transfer the case to the Southern District of New York, which notes that National General is headquartered in new York and all alleged misstatements were made in New York. Though Guilford heard the MDL, the new lawsuit "targets the sufficiency of National General's disclosures to investors, not Wells Fargo's obligations to consumers."

Guilford is to hear the motion on Nov. 18.