According to Bloomberg, the City of Westland Police & Fire Retirement System filed a group suit against MetLife stating the insurer allegedly mislead investors about its finances, triggering declines in the stock price. The news report states MetLife did not regularly use a government-mandated database—the Social Security Administration Death Master File—to determine whether holders of its annuity policies had died. Because of this the company issued financial statements that did not take into account “millions of dollars of benefits that should have been paid out,” the pension fund stated in its complaint.
MetLife reported in August that regulatory investigations into its death-benefits practices might result in substantial costs, and the stock fell 11% on the news, according to the complaint.
In October, MetLife said it would take at least $115 million after-tax charge in connection with the death benefits, and subsequently the stock fell 6%.
The suit seeks to represent people who bought the stock from February 2, 2010, to October 6, 2011. Defendants in the suit include C. Robert Henrikson, the former chief executive officer, and William Wheeler, the former finance chief and current president of the Americas.
The case is City of Westland Police & Fire Retirement System v. MetLife, No. 1:12-cv-00256.