MetLife Inc., the biggest U.S. life insurer, was sued by a Michigan police and firefighters pension fund for allegedly misleading investors about its finances, triggering declines in the stock price.
The City of Westland Police & Fire Retirement System filed a proposed class action, or group suit, today in U.S. District Court in Manhattan on behalf of MetLife shareholders against the company and its executives, saying the New York-based insurer made false and misleading statements about its financial condition.
MetLife didn’t regularly use a government-maintained database, the Social Security Administration Death Master File, to determine whether holders of its annuity policies had died, according to the complaint. Because of that, the New York-based company issued financial statements that didn’t take into account “millions of dollars of benefits that should have been paid out,” the pension fund said.
“We believe our disclosures were appropriate,” John Calagna, a spokesman for MetLife, said in an e-mailed statement.
The company reported in August that regulatory investigations into its death-benefits practices might result in substantial costs, and the stock fell 11 percent on the news, according to the complaint.
MetLife said in October that it would take at least a $115 million after-tax charge in connection with the death benefits, and the stock fell 6 percent.
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 suit seeks to represent people who bought the stock from Feb. 2, 2010, to Oct. 6, 2011.
MetLife rose 14 cents to $35.93 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have fallen 23 percent in the past 12 months.
The case is City of Westland Police & Fire Retirement System v. MetLife, 1:12-cv-00256, U.S. District Court, Southern District of New York (Manhattan).