Lincoln National Faces Securities Fraud Lawsuit Over $2.6B Loss

Lincoln National Corporation (NYSE: LNC) is facing a class-action lawsuit alleging securities fraud between November 4, 2020, and November 2, 2022. The lawsuit, filed by prominent law firms Lowey Dannenberg P.C. and Robbins Geller Rudman & Dowd LLP on behalf of investors, claims that Lincoln National and certain former and current officers made false and misleading statements and failed to disclose material information, resulting in a $2.6 billion net loss and a 33% stock price drop.

Why this matters: This lawsuit highlights the importance of transparency and accuracy in financial reporting, as misstatements can have devastating consequences for investors and the broader market. The outcome of this case may set a precedent for future securities fraud cases, influencing the way companies disclose information and the level of accountability they face.

The complaint alleges that the defendants failed to disclose a decline in Lincoln National's Variable Universal Life (VUL) business, overstated the goodwill associated with the life insurance business, used outdated policy lapse assumptions, overstated reserves, and misstated financial results and statements. The lawsuit also claims that the company's positive statements about its business, operations, and prospects were materially misleading and lacked a reasonable basis.

On November 2, 2022, Lincoln National reported a net loss of $2.6 billion for the third quarter, compared to a net income of $318 million in the same period the previous year. The significant loss was attributed to the company's annual review of deferred acquisition costs and reserve assumptions, as well as agoodwill impairmentto the life insurance business. Following this news, Lincoln National's stock price plummeted by more than 33%.

Investors who purchased or acquired Lincoln National securities during the class period and suffered substantial losses have the opportunity to lead the securities fraud class action lawsuit. The Lead Plaintiff Deadline is June 24, 2024. Shareholders who wish to serve as lead plaintiff must act before this date.

Lowey Dannenberg P.C. and Robbins Geller Rudman & Dowd LLP are representing investors in this case. Lowey Dannenberg is a national firm with significant experience prosecuting multi-million-dollar lawsuits and has recovered billions of dollars on behalf of its clients. Robbins Geller, ranked #1 on the ISS Securities Class Action Services Top 50 Report for recovering more than $1.75 billion for investors in 2022, is one of the world's leading complex class action firms representing plaintiffs in securities fraud cases.

TheLincoln National securities fraud class action lawsuitreflects the heightened scrutiny on financial disclosures and the growing importance of investor protection in today's market. The potential impact on Lincoln National's reputation and the financial consequences of the alleged fraud remain to be seen as the complex case unfolds. Investors who suffered losses now await the appointment of a lead plaintiff to direct the high-stakes litigation against the insurance giant.

Key Takeaways

• Lincoln National faces class-action lawsuit for securities fraud between 2020-2022.
• Alleged false statements and undisclosed info led to $2.6B net loss and 33% stock drop.
• Lawsuit claims misstatements on Variable Universal Life business and financial results.
• Investors who suffered losses can lead the lawsuit; Lead Plaintiff Deadline is June 24, 2024.
• Case highlights importance of transparency and accuracy in financial reporting.