The lawsuit alleges that defendants made materially false and misleading statements while failing to disclose that: (1) Hallmark Financial improperly accounted for its reserve for unpaid losses and loss adjustment expenses related to its Binding Primary Commercial Auto business; (2) the company would be forced to report a $63.8 million loss development for prior underwriting years; and (3) as a result, Hallmark Financial would exit from its Binding Primary Commercial Auto business. When the true details were revealed to the market, the price of Hallmark Financial stock fell more than 75% between March 2 and March 18, closing at $3.12 per share compared to the closing price of $14.33 per share on March 2, 2020.