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A securities class action has been filed in Virginia Eastern District Court claiming an insurer miscalculated and misrepresented the risk involved in a contract to provide ride-share insurance policies to Uber Technologies. The case is Employees’ Retirement Fund of the City of Fort Worth v. James River Holdings, Ltd. et al.  3:21-cv-00444.

On October 8, 2019, James River disclosed that it had delivered a notice of early cancellation of all policies issued to Uber, its largest client, amounting to more than 25% of the company’s premiums in 2019. The news caused the company’s share price to fall over 23% the next day, injuring investors. Then, on May 5, 2021, James River announced its first-quarter 2021 financial results, reporting “$170.0 million of unfavorable development in Commercial Auto, primarily driven by a previously canceled account that has been in runoff since 2019.” The company then announced that it was seeking to raise $175 million through public equity offering, which was priced at “the sector’s steepest discount ever,” resulting in another share price plummet, of 26%, injuring investors further.

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