NEW YORK, Nov. 14, 2014 (GLOBE NEWSWIRE) -- Wolf Popper LLP has filed a class action lawsuit against Barrett Business Services, Inc. (Nasdaq:BBSI), and two of its officers, in the U.S. District Court for the Western District of Washington (14-cv-05903), on behalf of all persons who purchased Barrett securities on the open market during the period February 12, 2013 through October 28, 2014. This action alleges claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act.
If you are a member of the Class, you may file a motion no later than January 5, 2015 to be appointed a lead plaintiff. A lead plaintiff is a representative party acting on behalf of class members in directing the litigation.
The Complaint charges that Defendants made materially false and misleading statements by understating its workers' compensation reserves by at least $80 million, resulting in the overstatement of the Company's earnings. Moreover, the Company consistently assured the investing public that its procedure for estimating liability for workers' compensation claims included "an evaluation of information provided by our internal claims adjusters and our third-party claims administrators, coupled with management's use of an independent actuary" and that the Company's workers' compensation claims reserves were "reasonable and objective."
On September 16, 2014, Copperfield Research published a report, revealing that Barrett's workers' compensation reserves have systemically been under reserved which may force it to recognize "a material charge to substantially increase its loss reserves."
On this news, Barrett common stock declined $8.95 per share or more than 15%, to close at $48.69 per share on September 16, 2014.
On October 28, 2014, the Company acknowledged that initiatives instituted in 2013 had caused a "disruption in the incurred and paid trends in the claims data during 2014, making it difficult for the Company's actuary to provide management with the best estimate of probable liability." Because of the previously undisclosed difficulty in establishing the workers' compensation reserves, the Company determined that the reserve was understated and was required to be increased by an additional $80.0 million. Thus, the Company revealed that its prior statements with respect to its procedures for estimating the workers' compensation reserves were false, and that in fact, the Company did not have a reasonable basis for estimating its workers' compensation reserves.
On this news, Barrett common stock plummeted $26.18 per share or 58%, to close at $18.28 per share on October 29, 2014.
Wolf Popper has successfully recovered billions of dollars for defrauded investors. The firm's reputation and expertise have been repeatedly recognized by the courts, which have appointed the firm to major positions in securities litigation. See www.wolfpopper.com