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WellCare Health Plans, Inc. Summary: The original complaint charges Defendants WellCare, along with its Chief Executive Officer, President and Chairman of its Board of Directors, and its Chief Financial Officer and Senior Vice President with making a series of materially false and misleading statements related to the Company's business and operations in violation of the Securities Exchange Act of 1934 (the "Exchange Act").
On October 24, 2007, state and federal law-enforcement agents armed with a federal search warrant raided WellCare's Tampa, Florida headquarters. Agents from the Federal Bureau of Investigation, the Health and Human Services Department and the Florida attorney general's Medicaid fraud unit participated in the raid. WellCare provides managed-care plans for 2.3 million Medicare and Medicaid participants nationwide.
Specifically, the Complaint filed alleges that at all times during the Class Period: (1) it was not true that the Company was operating according to plan, when, in fact, throughout the Class Period, defendants had propped up the Company's results by manipulating WellCare's accounting for revenues and income, and failed to report proper expenses and other material information about the Company;(2) unbeknownst to investors, defendants had materially overstated the Company's profitability by failing to properly account for the Company's health care expenses and results of operations and by artificially inflating the Company's financial results; (3) it was also not true that WellCare contained adequate systems of internal operational or financial controls, such that WellCare's reported financial statements were true, accurate or reliable; (4) as a result of the foregoing, it also was not true that the Company's financial statements and reports were prepared in accordance with GAAP ad SEC rules. Accordingly, as a result of the aforementioned adverse conditions which defendants failed to disclose, throughout the Class Period, defendants lacked any reasonable basis to claim that WellCare was operating according to plan, or that WellCare could achieve guidance sponsored and/or endorsed by defendants.
Following the news of the raid on WellCare's headquarters, the New York Stock Exchange subsequently halted trading of shares in WellCare. The Company's shares fell $7.10, or 5.8%, to $115.17 per share at market close on October 24, 2007. Then, on October 25, 2007, when shares resumed trading, shares opened at approximately $64.00 per share, before reaching an intra day low of $27.50 and closing at $42.67.
On March 11, 2008, two similar class actions were consolidated and the Public Pension Funds was appointed lead plaintiff and Bernstein, Litowitz, Berger & Grossmann, LLP and Labaton Sucharow LLP were appointed co-lead counsel. On October 31, 2008, the lead plaintiff filed a Consolidated Class Action Complaint. On January 23, 2009, the defendants filed motions to dismiss the Consolidated Class Action Complaint. On September 28, 2009, Judge Virginia M. Hernandez Covington signed the Order denying the defendants’ motions to dismiss the complaint.
INDUSTRY CLASSIFICATION:
SIC Code: 6324
Sector: Financial
Industry: Insurance (Accident & Health)
| COMPANY/ISSUER NAME: | WellCare Health Plans, Inc. |
| COMPANY/ISSUER TICKER: | WCG |
| COMPANY WEBSITE: | http://www.wellcare.com |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| Eastwood Enterprises LLC, et al. v. WellCare Health Plans, Inc., et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded | |||
| Type: Complaint | Date on the document: 10/26/2007 | ||
| Order | |||
| Type: Order Appointing LP/LC | Date on the document: 3/11/2008 | ||
| REFERENCE COMPLAINT | |||||||||||||||||
| Eastwood Enterprises LLC, et al. v. WellCare Health Plans, Inc., et al. | |||||||||||||||||
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| DOCUMENTS FOR THE REFERENCE COMPLAINT | |||
| Consolidated Class Action Complaint For Violations Of Federal Securities Laws | |||
| Type: Complaint | Date on the document: 10/31/2008 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 09/28/2009 | ||
| OTHER DOCUMENTS | |||
| Class Action Complaint for Violations of Federal Securities Laws - Demand for Jury Trial | |||
| Case Name and/or Number: Glenn Hutton, et al. v. WellCare Health Plans, Inc., et al. | |||
| Type: Complaint | Date on the document: 11/2/2007 | ||
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