QBE shareholders set to seek class action compensation

2 April 2014
Shareholders have an opportunity to hold QBE Insurance Group Limited to account over its share price collapse in December last year, with Maurice Blackburn Lawyers today announcing it is investigating a shareholder class action against the insurance giant.

After calling a trading halt on Friday 6 December 2013, QBE stunned the market on Monday 9 December 2013 when it announced it was expecting to post a loss of $US250 million for FY2013.

The market responded by wiping $4 billion off the market value of QBE in a day, with the stock plummeting by 22.3 per cent the day the announcement was made, closing $3.45 down at $12 - the biggest single day fall for QBE in the past 12 years.

The stock continued to fall the following day, shedding another $1.18. In total, QBE shares fell 30 per cent over two days.

When confirmed in February this year, the reported loss of $254 million was the first loss for the company since 2001, coming on the back of analysts' expectations of a $1billion-plus profit.

 QBE Class Action Graph

Class Actions Principal at Maurice BlackburnJacob Varghese, says the firm is investigating whether QBE breached its continuous disclosure obligations for not informing the market of the losses sooner.

"We have been approached by shareholders concerned that QBE was less than frank and timely in informing the market of the troubles in its North American business, which were at the heart of last year's surprise loss," Mr Varghese said.

"If QBE has breached its obligations or misled the market, investors that bought QBE shares in the period leading up to 9 December 2013 paid an inflated price for those shares. Those investors will be entitled to compensation. 

"Together with International Litigation Funding Partners, we are offering QBE shareholders the opportunity to register their claims and receive the support of litigation funding. If there is enough shareholder interest, it is very likely that QBE will face a class action.

"Shareholder class actions are an essential part of Australia's corporate governance landscape. They are an important mechanism for investors to make themselves heard in the boardroom.

"Full and honest disclosure is a small price to pay for access to the superannuation and life savings of Australians.

"The vast majority of Australian companies are conscientious about their disclosure obligations. But to keep the market fair for those that do play by the rules, we all have an interest in penalising the ones that don't. Our class actions do that."

To register your interest in participating in the case (at no cost), simply go to www.mauriceblackburn.com.au/QBE and fill out the online form. For further information on the case, and for media inquiries, contact Client Relations Manager Cameron Scott, on the details below.