Globe Life Stock Plunges 53% After Widespread Insurance Fraud Allegations by Short-Seller Fuzzy Panda

By Leira Aquino

Apr 12, 2024 01:48 AM EDT

Globe Life Inc.'s shares plummet 53% on Thursday due to allegations of insurance fraud by Fuzzy Panda Research.
Globe Life Inc.'s shares plummet 53% on Thursday due to allegations of insurance fraud by Fuzzy Panda Research. (Not the actual photo)
(Photo : Sean Gallup/Getty Images)

Shares of insurance giant Globe Life Inc. plummeted by 53% Thursday, halting trading multiple times, following explosive allegations of widespread insurance fraud levied by short-seller Fuzzy Panda Research.

The comprehensive 36-page investigative report released by Fuzzy Panda accused the company of engaging in fraudulent activities, among others. 

Fuzzy Panda Report Exposes Globe Life's Alleged 'Extensive Insurance Fraud'

In their report titled 'Globe Life (GL): Executives Disregarded Wide-Ranging "Insurance Fraud" While They Received Millions in Undisclosed Kick-Back Scheme,' Fuzzy Panda Research explicitly described "extensive allegations of insurance fraud" at Globe's wholly-owned subsidiary American Income Life (AIL). 

This included the revelation that policies had been written for dead and fictitious individuals, contributing to a surge in fraudulent practices within the company.

The short-seller's report highlighted specific instances of fraudulent behavior, such as agents forging signatures and opening accounts in the names of deceased people. 

These actions were cited as evidence of unethical conduct within AIL and raised concerns about the integrity of Globe Life's operations.

Last year, Business Insider revealed that agents from a prominent AIL sales agency, the Arias Organization, engaged in signature forgery and opened accounts using the identities of deceased individuals.

Fuzzy Panda's recent report, however, suggests that fraud at Globe Life extends beyond Arias, claiming that it had found allegations of fraud at many of AIL's biggest agencies.

"The fraudulent insurance policies are NOT a one-off. It isn't isolated to just one rogue sales team (like Arias Agency)," the report read. "Arias is just a small piece of this."

The report further highlighted concerns about AIL's recruitment practices, including allegations of hiring individuals with criminal records and encouraging deceptive tactics to evade regulatory scrutiny.

The short-seller also raises concerns about a few alleged sexual assault cases involving employees at the company.

Additionally, Fuzzy Panda's investigation uncovered alleged kickback schemes and financial malfeasance within AIL, adding to the gravity of the situation.

READ NEXT: FTX Founder Sam Bankman-Fried Appeals $8 Billion Fraud Conviction, 25-Year Sentence

Globe Life Denies Fraud Allegations

In response to the allegations, Globe Life shortly issued a statement after the close of trading hours. The company described the Fuzzy Panda report as "wildly misleading" and asserted its commitment to ethical standards and regulatory compliance. 

"We are disappointed today to see self-motivated short sellers push inflammatory allegations in order to drive down Globe Life's stock price," the company said in a statement released on Thursday. "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."

Globe Life also announced its intention to provide a comprehensive rebuttal to the allegations and explore legal options to address the situation.

As trading resumed after the halt, Globe Life's stock rebounded by 9%. Nonetheless, Thursday's decline was Globe Life's most significant single-day drop, marking its lowest market performance in over a decade.

READ MORE: Donald Trump's $175 Million Fraud Bond at Risk as New York AG Scrutinizes Insurance Company

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