Globe Life's stock crashed amid federal probes. Here's everything you need to know.

Globe Life stock tanked after a series of damning lawsuits, probes, and investigative reports. Here's what happened.

• Globe Life is floundering after a series of lawsuits, probes, and investigative reports.
• The company's stock plummeted by more than 50% in a single day.
• Global Life and a subsidiary now face DOJ subpoenas over potential wrongdoing at a leading agency.

An insurance giant is floundering after Business Insider reported that potential wrongdoing at a leading sales agency had sparked a Department of Justice probe and two short-sellers released damning reports.

Globe Life Inc., a publicly traded insurance company based in Texas, was once flying high. Its top insurance agents basked in luxury with lavish company retreats and expensive sports cars.

The holding company operates five wholly owned subsidiaries, the largest of which is American Income Life, or AIL. Driving AIL's profits is a layer of affiliated insurance agencies that exclusively sell AIL policies. Arias Organization, formerly known as Arias Agencies, has historically been one of AIL's biggest producers; it is captained by Simon Arias III, who multiple former agents said has built an aggressive, drug-fueled sales culture that recalls the Wolf of Wall Street.

The company's foundation began to crumble when a former Arias agent named Renee Zinsky filed a stunning federal lawsuit in 2022, alleging a pervasive culture of sexual assault, sexual harassment, and customer abuses at Arias. She accused her manager, senior leader Mike Russin, of sexually assaulting her multiple times.

BI was the first outlet to report on Zinsky's lawsuit; BI's investigation also cited more than a dozen former agents who described a toxic workplace that was punitive to agents who didn't reach their goals, alleging that they were encouraged to put through charges without customer approval and write policies for dead people to drum up commissions. After BI's first investigation appeared, multiple other agents came forward with sexual assault accusations and accounts of brutal hazing and customer abuses.

Things then really began to fall apart for the company.

By August 2023, Warren Buffett's Berkshire Hathaway had dumped over half of its 6.35 million shares of Globe Life. That same month, an Arias spokesperson confirmed to BI that insurance regulators had shown up for an unannounced visit at Arias headquarters in Pennsylvania, asking to speak with Simon Arias.

In October, Pennsylvania insurance regulators issued AIL a $130,000 fine for deceptive consumer practices. Though Arias Organization was not named specifically, it operates half of AIL's offices in Pennsylvania.

In a rare move in November, the Equal Employment Opportunity Commission reversed its prior dismissal of two sexual harassment claims against AIL and the Arias Organization, including Zinsky's claim and one by another former agent, Abeni Mayfield, whose allegations BI had previously reported. Three current or former insurance agents filed new charges with the EEOC, accusing the Arias Organization of sexual harassment, racism, and customer fraud.

In March, BI broke the news that the Department of Justice had sent subpoenas to Globe Life and American Income Life, requesting documents related to the Arias Organization's internal investigations, customer practices, and policyholder information. By then, Berkshire Hathaway had sold off all its shares in Globe Life.

Last week, the short-seller Fuzzy Panda Research published a report accusing AIL of fraud, customer abuse, and sexual assault, naming Globe Life and Arias in the report. In a post to X, formerly Twitter, Fuzzy Panda said that Susan Antilla's "great reporting" for BI "is what led us to start researching $GL."

That report came on the heels of an April 3 investor presentation by short-seller Nate Koppikar that extensively cited BI's reporting and called Globe Life "a dead-end pyramid scheme."

Fuzzy Panda said it had uncovered evidence of fraud at many of AIL's largest agencies and that AIL had "fostered an environment permissive of sexual assault, rape, racism, and widespread illicit drug activity." While Globe Life denied the claims and threatened legal action after the market closed on Thursday, the report had already sent the company's stock plummeting. (The stock recovered some of its value on Friday.)

"We believe our work speaks for itself," Fuzzy Panda told BI. "It's disappointing that Globe Life neglected to address the evidence of insurance fraud and sexual misconduct that we uncovered."

Throughout the entire timeline of accusations and investigations, Globe, AIL, and Arias have denied the accusations made against them, as have Simon Arias and Mike Russin.

Last month, Zinsky withdrew a portion of her claim that had been sent to arbitration; her case against Russin remains in federal court, and the EEOC and DOJ investigations appear to be ongoing.