Woolgar v. Kingstone Cos. Inc.

OPINION & ORDER   Lead Plaintiff Donald Fitzherbert brings this federal securities class action against Kingstone Companies, Inc. (“Kingstone” or the “Company”), as well as Kingstone’s Chief Executive Officer Barry Goldstein, former Chief Executive Officer Dale Thatcher, Chief Financial Officer Victor Brodsky, and Chief Actuary Benjamin Walden (collectively, “Defendants”¹), alleging that, from March 14, 2018 to April 29, 2019, Defendants committed securities fraud in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. Specifically, Plaintiff alleges that Defendants made materially false and misleading statements with respect to the Company’s loss reserve estimates, the effectiveness of its internal controls, and its underwriting, risk management, and reserving practices. Before the Court is Defendants’ motion to dismiss the Amended Class Action Complaint. For the reasons that follow, Defendants’ motion is granted. BACKGROUND I. Factual Background The following facts are drawn from Plaintiff’s Amended Class Action Complaint (the “CAC” or “Complaint”), Dkt. 36, and are assumed to be true for the purpose of this motion. See Stadnick v. Vivint Solar, Inc., 861 F.3d 31, 35 (2d Cir. 2017). A. The Parties Defendant Kingstone is the parent and holding company of Kingstone Insurance Company (“KICO”), its wholly owned subsidiary. CAC

2, 22. KICO is a “property and casualty insurance company” that provides “insurance products for individuals and small to mid-size businesses in the northeast,” and “distributes its insurance products through an independent agent and broker network.” Id. 2. Kingstone is incorporated under the laws of the state of Delaware. Id. 22. Both Kingstone and KICO are headquartered in New York. Id. 2. Kingstone trades on the NASDAQ under the ticker symbol “KINS.” Id. 22. Defendant Barry Goldstein is Kingstone’s current CEO and President, and has been since July 19, 2019. Id. 23. Goldstein also served as Kingstone’s CEO and President from March 2001 to December 31, 2018. See id. In addition, Goldstein is the Executive Chairman of Kingstone’s Board, as well as the CEO, President, and Chief Investment Officer of KICO, Chairman of KICO’s Board, and Chairman of KICO’s Executive Committee. Id.