The MIIX Group was one of the largest medical malpractice liability insurers in the United States until 2002 when the company disclosed that its loss reserves were wholly inadequate, and the company would be unable to pay future liability claims and that it would be putting its non-New Jersey insurance business into a solvent run-off.
The company expanded by setting predatory pricing that would not meet the risks of future losses and using the expansion as a platform to take the company public. Investors who purchased stock were unaware of the inadequate funding, and the announcement of pending closures resulted in a financial loss for these investors.
In addition, despite claims that the company would continue business in New Jersey, company officers actually planned to sell the New Jersey underwriting business to a privately held company, which they controlled. These executives did not disclose their ownership of the private company and falsely told investors that the sale was fair and impartially negotiated when it was not.