Actions of Global life rebounded about 20% Friday morning after falling 53% Thursday following a short seller’s report of multiple cases of insurance fraud.
Fuzzy Panda Research disclosed a short position in the Texas-based insurance company after discovering “numerous allegations of insurance fraud that were ignored by management despite being obvious and reported hundreds of times.”
The short seller claims Globe Life took out insurance policies for fictitious and deceased people, forged signatures and withdrew funds from bank accounts without customer approval. They also allege that fictitious bank accounts were used to fund fake insurance policies so employees could collect their bonuses.
In a statement released Thursday, Globe Life refuted the allegations and said they were “motivated solely by short-term profit.”
“We reviewed the report and found it to be extremely misleading, mixing anonymous allegations with recycled arguments pushed by the plaintiff law firms to coerce Globe Life into settlements,” the company said.
CNBC could not independently verify the report’s allegations.
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