The Phoenix Cos. stock jumped in value Monday as a 1-for-20 reverse stock split took effect, though a New York law firm says it is "investigating" whether the split adversely affects some shareholders.

The split became effective after the close of the market Friday, and shares of PNX traded at the new value starting Monday. Every 20 shares of common stock outstanding were combined into one share.

Phoenix said shareholders granted the company's board discretionary authority to enact the reverse stock split during the annual shareholders' meeting on May 15. As a result of the reverse split, some people will be left with a fraction of a share and Phoenix has said it will pay cash for those fractional shares based on Friday's closing price.

New York-based law firm Wohl & Fruchter LLP said the cash offer could force some shareholders to cash out at an under-valued price. The law firm said on July 18 that it is investigating the reverse split, saying that when Phoenix demutualized in 2001 and became a public company, the policyholders were issued about 56.2 million unregistered shares.

The company, however, has not filed a lawsuit against Phoenix as of Monday.

"Ordinarily when we make shareholders surrender their shares, we expect them to get fair value for the shares," Ethan Wohl of Wohl & Fruchter told The Courant on Monday. "Here, there is some kind of market for the company's shares, obviously, but management clearly is of the view that the stock is underpriced and part of the purpose of the reverse split is to eliminate perception that there is downward pressure on the price because of the large number of small shareholders dating to the demutualization of the company."

The Hartford-based boutique life insurer and annuity company said there are about 100,000 fractional shares after the reverse split. At Friday's closing price of $1.49 before the split, that means the fractional shares would be worth about $2.9 million total, said Phoenix spokeswoman Alice S. Ericson.

"We do not know why this law firm sees opportunity for itself in Phoenix's reverse stock split," Ericson said. "We are confident the transaction is in the best interest of our shareholders and policyholders."

The number of shares of common stock were reduced from about 116 million to about 5.8 million. Phoenix shares were valued at $29.55 at close of trading Monday, down 25 cents.