NEW YORK, July 15, 2009 (GLOBE NEWSWIRE) -- Roy Jacobs & Associates has filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of purchasers of Manulife Financial Corporation (NYSE:MFC) ("Manulife" or the "Company") securities between March 28, 2008 and June 22, 2009 (the "Class Period"). The Complaint charges Manulife and certain of the Company's executive officers with violations of federal securities laws.
For further information, please contact Roy L. Jacobs, Esq. toll-free at 1-888-884-4490 or by e-mail to rjacobs@jacobsclasslaw.com. You may also visit the Firm's website at www.jacobsclasslaw.com.
This case involves Manulife's segregated fund contracts ("Segregated Fund Contracts") business, and its failure to disclose the true risks the Company could face to support this business during adverse economic conditions. Segregated Fund Contracts are insurance contracts also known as individual variable annuities that offer death benefits and maturity guarantees where Manulife agreed to make guaranteed payments to the beneficiaries in future years. Manulife invests the premiums received on these contracts in order to cover the future obligations.
The complaint alleges that Manulife made false and misleading statements regarding its ability to manage and control risk in the Segregated Fund Contracts business. In fact, contrary to the Company's own purported risk management strategy, Manulife applied no material hedging techniques to limit this risk during an economic downturn. Indeed, at the very time the risk management strategy was disclosed to the investing public, the world economic system was suffering huge negative shocks and the equity markets were highly volatile and risky. The complaint further alleges that contrary to its purported risk management strategy, Manulife built up a massive stock portfolio, which it chose to leave unhedged. This resulted in a huge decline in the funds available to guaranty the Segregated Fund Contracts obligations, forcing the Company to raise billions in capital.
Thus, on February 12, 2009, Manulife revealed that its reserves for Segregated Fund Contracts had to be increased from $526 million as of December 31, 2007 to an astonishing $5.7 billion for the period ending December 31, 2008. As a result of the disclosure of this adverse news, which revealed part of the truth about the risk of the Company's Segregated Fund Contracts business, the Company's shares declined from $15.25 per share on February 11, 2009, to $9.87 on February 23, 2009.
Then, on June 19, 2009, after the market closed, Manulife announced that it received an enforcement notice from the Ontario Securities Commission ("OSC") of a preliminary conclusion that the Company failed to meet its obligations to properly disclose the market price risks of Manulife's Segregated Fund Contracts and variable annuity businesses to investors in the Company's securities. On June 22, 2009, the Company's shares dropped 12% to close at $17.67 on an unusually high trading volume of almost 8 million shares.
If you purchased Manulife securities during the period between March 28, 2008 and June 22, 2009, have suffered a loss, and you are interested in discussing your rights free of charge, please contact Roy L. Jacobs. Mr. Jacobs will be glad to personally speak with you. All motions for Lead Plaintiff must be filed no later than September 8, 2009. You are not required to have sold your shares to seek damages or to serve as a Lead Plaintiff.
You may also find necessary materials relating to this case at our website at www.jacobsclasslaw.com.