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Case Status:    DISMISSED    
On or around 09/20/2010 (Date of order of final judgment)

Filing Date: October 24, 2007

The original Complaint charges Aetna and certain of its officers and directors with violations of sections 10(b), 18, and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Specifically, the Complaint alleges that during the second half of 2005, Aetna touted its expanding membership rolls as a primary reason for a growth in operating income.

The Company's Medical Cost Ratio ("MCR") is the percentage of dollars a company spends on health care, including physician reimbursement, and is the key number for health plans in terms of their level of profitability. For six months, defendants misrepresented or failed to disclose the rise in Aetna's MCR. Unbeknownst to investors, however, from at least as early as September 2005, defendants had in their possession information that contradicted or rendered statements made by the defendants throughout the Class Period false.

The complaint alleges that on April 27, 2006, the Company shocked the market when it disclosed a rise in its MCR relative to the prior year. This higher MCR, coupled with large membership growth, meant that the Company was under-pricing its health plans in order to speed up enrollment. This fact, which the defendants knew by September 2005, was conspicuously absent from defendants' public disclosures between October 27, 2005 and April 27, 2006. From April 26, 2006 to April 27, 2006, Aetna's shares fell from $46.43 per share to $37.00 per share, a decline of $9.43 per share, or over 20 percent, representing a loss in market capitalization of $5.4 billion.

According to the Company’s FORM 10-Q for the quarterly period ended March 31, 2009, two purported class action lawsuits were pending in the United States D istrict Court for the Eastern District of Pennsylvania (the “Pennsylvania Federal Court”) against Aetna and certain of its current or former officers and/or directors. On October 24, 2007, the Southeastern Pennsylvania Transportation Authority filed suit on behalf of all purchasers of Aetna common stock between October 27, 2005 and April 27, 2006. The second lawsuit was filed on November 27, 2007, by the Plumbers and Pipefitters Local 51 Pension Fund on behalf of all purchasers of Aetna common stock between July 28, 2005 and July 27, 2006. On June 3, 2008, plaintiffs in these two lawsuits filed a consolidated complaint in the Pennsylvania Federal Court on behalf of all purchasers of Aetna common stock between October 27, 2005 and July 27, 2006. The consolidated complaint (the “Securities Class Action Litigation”) supersedes and replaces the two previous complaints. The plaintiffs allege that Aetna and four of its current or former officers and/or directors violated federal securities laws. The plaintiffs allege misrepresentations and omissions regarding, among other things, our medical benefit ratios and health plan pricing practices, as well as insider trading by certain individual defendants.

On June 9, 2009, the Honorable Thomas N. O'Neill, Jr., issued the Memorandum Opinion and Order granting the defendants’ motion to dismiss the Consolidated Class Action Complaint. The action was dismissed with prejudice. The plaintiffs filed a Notice of Appeal on July 7, 2009.

According to an article dated August 12, 2010, a securities fraud suit against insurance giant Aetna Inc. fell flat on Wednesday when a federal appeals court refused to revive claims by investors who said the company made false statements about its "disciplined" pricing strategies that were designed to drive up the stock price so that three top executives could cash in and sell $61 million in stock. The unanimous three-judge panel of the 3rd U.S. Circuit Court of Appeals concluded that all of the allegedly misleading statements were protected by the "safe harbor" in securities law because they amounted to nothing more than "forward-looking" statements that were accompanied by "meaningful cautionary" statements that put investors on notice of the risk.

COMPANY INFORMATION:

Sector: Financial
Industry: Insurance (Accident & Health)
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: AET
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: E.D. Pennsylvania
DOCKET #: 07-CV-04451
JUDGE: Hon. Thomas N. O'Neill, Jr.
DATE FILED: 10/24/2007
CLASS PERIOD START: 10/27/2005
CLASS PERIOD END: 04/27/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Grant & Eisenhofer (New York)
    485 Lexington Avenue, 29th Floor, Grant & Eisenhofer (New York), NY
    646.722.8500 646.722.8500 · lawyers@gelaw.com
  2. Grant & Eisenhofer (Wilmington)
    1201 N. Market Street, Suite 2100, Grant & Eisenhofer (Wilmington), DE 19801
    302.622.7000 302.622.7100 · lawyers@gelaw.com
  3. Schiffrin Barroway Topaz & Kessler, LLP (Radnor)
    280 King of Prussia Road, Schiffrin Barroway Topaz & Kessler, LLP (Radnor), PA 19087
    610.667.7706 610.667.7056 · info@sbtklaw.com
No Document Title Filing Date
COURT: E.D. Pennsylvania
DOCKET #: 07-CV-04451
JUDGE: Hon. Thomas N. O'Neill, Jr.
DATE FILED: 06/02/2008
CLASS PERIOD START: 10/27/2005
CLASS PERIOD END: 07/27/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Grant & Eisenhofer (New York)
    485 Lexington Avenue, 29th Floor, Grant & Eisenhofer (New York), NY
    646.722.8500 646.722.8500 · lawyers@gelaw.com
  2. Grant & Eisenhofer (Wilmington)
    1201 N. Market Street, Suite 2100, Grant & Eisenhofer (Wilmington), DE 19801
    302.622.7000 302.622.7100 · lawyers@gelaw.com
  3. Schiffrin Barroway Topaz & Kessler, LLP (Radnor)
    280 King of Prussia Road, Schiffrin Barroway Topaz & Kessler, LLP (Radnor), PA 19087
    610.667.7706 610.667.7056 · info@sbtklaw.com
No Document Title Filing Date
No Document Title Filing Date
No Document Title Filing Date