Globe Life shares rebound about 20% after plummeting over 50% Thursday
A short-seller uncovered "extensive allegations of insurance fraud ignored by management despite being obvious and reported hundreds of times."
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Shares of Globe Life rebounded about 20% Friday morning after sinking 53% Thursday following a short-seller report alleging multiple instances of insurance fraud.
Fuzzy Panda Research disclosed a short position in the Texas-based insurance company after it uncovered "extensive allegations of insurance fraud ignored by management despite being obvious and reported hundreds of times."
The short-seller claims that Globe Life had insurance policies written for fictitious and deceased individuals, forged signatures and had funds withdrawn from bank accounts without customer approval. They also allege that fictitious bank accounts were used to fund fake insurance policies so employees met their bonuses.
In a statement Thursday, Globe Life refuted the allegations and said they are "driven solely by short-term profit."
"We reviewed the report and found it to be wildly misleading, mixing anonymous allegations with recycled points pushed by plaintiff law firms to coerce Globe Life into settlements," the company said.
CNBC could not independently verify the report's allegations.
