AmTrust appoints new chief financial officer after accounting trouble

New York-based property/casualty holding company AmTrust Financial Services has appointed Adam Karkowsky as executive vice president and chief financial officer.

Karkowsky's appointment follows a comprehensive search process, which included internal and external candidates, the company said in a statement.

The insurer had delayed its 2016 consolidated financial statements and said that the company's 2014 and 2015 financial reports would be restated.

Shareholder rights law firm Robbins Arroyo filed a class action complaint against AmTrust. In the filing, the law firm accuses AmTrust officials of falsely attesting to the accuracy of the financial statements, to the disclosure of any material changes to the company's internal controls over financial reporting, and to the disclosure of all fraud.

AmTrust should take a reserve charge “in the hundreds of millions of dollars” and commit to “much-improved disclosure” in order to restore investor confidence, analysts at Keefe, Bruyette & Woods suggested.

Meanwhile, AmTrust has completed a $300 million capital raise through a private placement to support its insurance units.

Karkowsky has been AmTrust's executive vice president, strategic development and mergers & acquisitions since March 2011.

His predecessor Pipoly, who has served as chief financial officer since 2005, will work with Karkowsky to ensure an effective and seamless transition of responsibilities.

"Adam, with his leadership and knowledge of AmTrust and demonstrated financial expertise, is uniquely qualified to assume the role of CFO," said Barry Zyskind, chairman and CEO.

"Adam is an important leader in guiding the strategic growth of the Company, both domestically and internationally. He has a deep understanding of AmTrust and the property and casualty insurance industry. We look forward to benefitting from Adam's knowledge of our industry and our company in his new role as we work to capitalize on AmTrust's size and scale to achieve meaningful organic growth and significantly increase operational efficiencies across our business."

Karkowsky said: "As part of our focus on operational excellence across the organization, we will be building on the progress that has been made to strengthen AmTrust's financial reporting capabilities and expertise, while also further enhancing our disclosure regarding the Company's business and financial performance."

Zyskind concluded: "On behalf of the entire Board and management team, I want to thank Ron for his many contributions and hard work as CFO over the past twelve years. We look forward to continuing to benefit from Ron's experience and capabilities."

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