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UnumProvident Faces Securities Suit

By Marcella De Simone

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Levy and Levy P.C., Stamford, Conn., a law firm, is trying to organize a class-action lawsuit against UnumProvident Corp., Chattanooga, Tenn., in the U.S. District Court for the Eastern District of Tennessee.

Levy and Levy is seeking court permission to represent investors who bought UnumProvident securities between May 7, 2001, and Feb. 4, 2003.

The firms complaint accuses the disability insurer of violating the Securities Exchange Act of 1934 by using false and misleading statements about troubled investments to inflate its share price.

Inflated share prices helped UnumProvident raise $250 million through a June 13, 2002, bond offering, the law firm alleges in the complaint.

UnumProvident announced Feb. 5 that it had recorded $93 million in investment losses, and it also reported that it was responding to Securities and Exchange Commission requests for information relating to its investment disclosures.

Securities suits are not unusual when a public company experiences the type of stock activity that UnumProvident has recently experienced, UnumProvident spokeswoman Becky Bumgardner says.

“We find these complaints to be entirely without merit and we intend to defend these claims vigorously,” Bumgardner adds.

Reproduced from National Underwriter Edition, March 3, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.