Globe Life says law firm Wilmer Hale hired to review short seller assertions

Frank Svoboda, Co-Chairman of the Board of Globe Life, stated on the company’s earnings call, according to a transcript: “Before we continue, we’d like to take a moment to address ahead of time questions many of you may have regarding dismissed litigation against the company, the DOJ inquiry, and the recent attack on the company by a short seller. For over 70 years, our business model has stood the test of time. And as we will further discuss today, we continue to generate sustainable earnings growth that provide long-term value for our shareholders. With over 17 million policies in force, our millions of customers value the protection of the company’s products, and we strive to be there when our customers need us most. We want to assure you that Globe Life, its management and our Board of Directors strive to act in accordance with the highest level of ethics and integrity at all levels of the organization. While we believe the short seller’s claims present a false and misleading overall picture of the company and its subsidiaries, as a demonstration of our commitment to operating ethically, the company’s Audit Committee has retained the international law firm, Wilmer Hale, to conduct an independent review of the assertions in the short seller’s report. As you can appreciate, given the ongoing nature of the DOJ’s investigation and out of respect for the integrity of the independent review initiated by the Audit Committee, we are limited in what we can say. For this reason, we will not be taking any additional questions on these issues today, although our intent is to address questions we understand you may have to the extent possible. We will provide updates as and when appropriate. First, we want to provide a brief update on the status of the lawsuit filed by claimant (Renee Zinski), a former independent contractor sales agent, which, as many of you know, included allegations of sexual harassment and purported fraud joint business practices, neither of which we tolerate, and the claim that she was misclassified as an independent contractor. On September 27, 2022, the claim had filed the demand for arbitration and participated in the selection of the 3 arbitrator panel. After 1.5 years of litigation, the arbitration hearing was scheduled to begin on March 4, 2024. The night before the hearing, the claim had sought to dismiss her claims without obtaining any relief or payment. After a lengthy discussion on the record, the panel dismissed the case with prejudice, and on April 3, 2024 of the United States District Court for the Western District of Pennsylvania affirmed the dismissal with prejudice. On March 14, 2024, Global Life filed an 8-K addressing this matter in more detail, and the court filings are publicly available for those interested. Also noted in our Form 8-K, Global Life and American Income received subpoenas from the U.S. Attorney’s Office for the Western District of Pennsylvania. These subpoenas documents related to sales practices by certain licensed insurance agents in the areas of organization who are contracted to sell American Income policies. The company and American Income is in the process of responding to these subpoenas, which were received in late 2023, and have been fully cooperating with the DOJ. The DOJ has not asserted any claims or made allegations against the company and American Income with respect to the foregoing investigation. And the company currently is not aware that any legal proceedings are contemplated by governmental authorities. While no assurances can be made and we are still evaluating the matter, management did not believe when the subpoenas were received, and does not believe now, that it is either reasonably possible or probable this investigation will result in material liability to the company. As such, the company did not disclose the existence of the request from the DOJ in its Form 10-K. We are providing additional information regarding this matter to you now in light of recent questions that have been raised.”