In re The Allstate Corporation Securities Litigation

On January 20, 2017, Labaton Keller Sucharow was appointed lead counsel in a securities class action against The Allstate Corporation (Allstate or the Company).

The Lead Plaintiffs allege that, in 2014, Allstate experienced a significant increase in the number of claims filed against its Allstate brand auto insurance (claims frequency), which resulted from Allstate loosening its underwriting standards to grow the size of its insurance business.  Defendants misled investors by first failing to disclose the claims frequency increase.  Then, after Allstate acknowledged the increase, Defendants misled investors by attributing the increase to external factors, such as severe weather and the number of miles driven by Allstate’s auto insurance customers, rather than Allstate’s growth strategy.  In August 2015, Allstate finally admitted that its push for new business was a factor in the increase in claims frequency.  On this news, Allstate’s stock price fell more than 10 percent, wiping out billions of dollars in its value.

On March 30, 2017, Lead Plaintiffs filed a consolidated class action asserting claims under Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 and alleging that Defendants made material misstatements and omissions with respect to the cause of a large spike in auto claims frequency (i.e., the number of claims filed against auto insurance policies), which allegedly had a material negative impact on the Company’s financial condition throughout the Class Period (from October 29, 2014, through August 3, 2015, inclusive).  Lead Plaintiffs filed a Second Consolidated Class Action Complaint on September 12, 2018, that named the City of Providence as an additional class representative.

Lead Plaintiffs moved for class certification on June 22, 2018.  The Court granted Lead Plaintiffs’ motion on March 26, 2019.  Defendants appealed the class certification order, and on July 16, 2020, the Seventh Circuit issued an opinion affirming the class certification order, in part, and vacating and remanding, in part.  The District Court ordered the Parties to file lists of class certification issues to be decided and ordered the Parties to submit supplemental class certification briefing.

On December 21, 2020, the District Court issued a second order certifying the class.  On February 19, 2021, Class Representatives filed an unopposed motion for approval of form and notice of pendency of the Action as a class action, which was granted on February 20, 2021.  Beginning on March 12, 2021, the Class Notice was mailed to potential Class Members and made available on the case website.  The Class Notice provided Class Members with the opportunity to request exclusion from the Class.

The Parties engaged in extensive discovery that included the review of nearly 300,000 pages of documents; and taking or defending 35 fact and expert depositions, including the depositions of Class Representatives, Class Representatives’ investment advisors, numerous current and former employees of the Company, and the Parties’ experts.  In connection with expert discovery, the Parties submitted 15 expert reports.  On March 23, 2022, Defendants moved for summary judgment, seeking dismissal of all claims alleged in the action, which Class Representatives opposed.  On July 26, 2022, the Court granted in part and denied in part Defendants’ summary judgment motion.  On January 10, 2023, Class Representatives filed a motion to bifurcate trial, Defendants filed a trial brief, and the Parties filed various pre-trial motions in limine and opposition papers.

Following the submission of the Joint Pretrial Order, the Parties agreed to explore the possibility of a negotiated resolution of the Action and engaged the Honorable Layn R. Phillips (Ret.), who had conducted two prior mediations in the Action, one in August 2019 and the second in June 2022.  On June 28, 2023, a representative of Northern California Carpenters and counsel for all Parties met for a full day mediation session with Judge Phillips.  The Parties reached an agreement in principle to settle the Action that day and executed a Term Sheet, subject to the execution of a customary “long form” stipulation and agreement of settlement and related papers.  On August 11, 2023, the Parties executed the Stipulation and on September 26, 2023, the Court preliminarily approved the Settlement.

The case is In re The Allstate Corporation Securities Litigation, No. 16-cv-10510 (N.D. Ill.).  Labaton Keller Sucharow represents Carpenters Pension Trust Fund for Northern California, Carpenters Annuity Trust Fund for Northern California, and the City of Providence Employee Retirement System.  In addition to Allstate, the defendants include CEO Thomas J. Wilson and former President Matthew E. Winter.

Submit Claim Form

If you purchased the common stock of Allstate during the Class Period and were damaged thereby, you may be entitled to a payment from a class action settlement.  To be eligible for a payment, you must submit a Claim Form to the Claims Administrator by February 8, 2024.

Settlement Hearing

A Settlement Hearing was held on December 19, 2023, in Courtroom 1703 at the United States District Court for the Northern District of Illinois, Everett McKinley Dirksen United States Courthouse, 219 South Dearborn Street, Chicago, IL 60604.

If you have questions about the Settlement, please contact Labaton Keller Sucharow at settlementquestions@labaton.com or 1-888-219-6877, or contact the Claims Administrator, at 1-877- 829-4143.

Additional information about the Settlement can also be found at www.AllstateSecuritiesLitigation.com.