Aflac Incorporated’s public statements included assurances about ethics, the excellent treatment of employees, and even a homey little recollection of someone’s mother’s “persistent wisdom” about looking out for others. But the complaint alleges that in reality the company was acting very differently, making its statements violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and leading to stock losses when the truth came out.
The class for this action is all persons and entities who acquired Aflac common stock from February 27, 2013 through January 11, 2018.
Aflac provides insurance policies that supplement traditional health insurance, including plans for accidents, cancer, critical illness and care, hospitalization, dental or vision care, life, and short-term disability. Aflac is a Fortune 500 company serving more than 50 million people in the fifty US states, certain US territories, and Japan.
The complaint quotes many of Aflac’s public statements during the class period, including SEC filings and Corporate Citizenship and Social Responsibility Reports. These statements claimed a workforce that included over 70,000 independent-contractor salespeople, touted their incentives, and bragged about inclusion on lists of World’s Most Ethical Companies and Best Companies to Work For.
Other statements emphasized care for workers:
However, the complaint claims that these statements are misleading and fail to disclose a number of important facts:
On January 11, 2018, The Intercept published a report that revealed previously undisclosed lawsuits against the company alleging exploitation of workers, manipulation of accounting, and insider trading. At the news, the company’s stock fell by more than 7%.