City of Westland (Mich.) Police & Fire Retirement System sued MetLife for allegedly misleading investors about its finances, triggering declines in the insurer’s stock price.
The $131 million pension fund filed a proposed class action Thursday in U.S. District Court in Manhattan on behalf of MetLife shareholders against the company and its executives, saying the insurer made false and misleading statements about its financial condition.
MetLife didn’t regularly use a government-mandated 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 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% 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%.
Defendants in the suit include C. Robert Henrikson, the former CEO, and William Wheeler, former CFO and current president of the Americas.
The suit seeks to represent people who bought the stock from Feb. 2, 2010, to Oct. 6, 2011.