According to a press release dated August 6, 2009, the complaint alleges that, during the Class Period, defendants issued numerous statements regarding the Company’s financial performance. As alleged in the complaint, these statements were materially false and misleading because defendants misrepresented and/or failed to disclose the following adverse facts, among others: (i) that the Company was reporting materially inaccurate revenue figures; (ii) that the Company’s reported financial results were materially misstated and did not present the true operating performance of the Company; (iii) that the Company’s shareholders’ equity was materially overstated during the Class Period, including the overstatement of shareholders’ equity by $20.6 million at December 31, 2006; and (iv) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its corporate governance practices, its prospects and earnings growth.
On March 17, 2008, the Company disclosed that it did not maintain effective controls over the accounting and disclosure of insurance policy benefits and the liabilities for insurance products and that it would therefore be restating its financial results for the years ended December 31, 2004 and 2006, along with affected Selected Consolidated Financial Data for 2003 and 2004, and quarterly financial information for 2006 and the first three quarters of 2007.
In response to this announcement, shares of the Company’s stock fell $1.30 per share, or 12.9%, from a close of $10.06 per share on March 14, 2008, the last trading date before the announcement, to close at $8.76 per share, on extremely heavy trading volume.
According to the Order dated October 30, 2009, Monroe County is appointed Lead Plaintiff and the law firm of Coughlin Stoia Geller Rudman & Robins LLP is appointed Lead Counsel.
On January 12, 2010, the lead plaintiff filed an Amended Class Action Complaint. On March 12, 2010, the defendants responded by filing a motion to dismiss the Amended Complaint. Before any ruling on the motion, the lead plaintiffs filed a Second Amended Complaint on June 2, 2010. On August 2, 2010, the defendants responded by filing a Motion to Dismiss The Corrected Second Amended Complaint in it's Entirety and with Prejudice.
According to an article dated March 31, 2011, a New York federal judge on Wednesday tossed a putative shareholder class action over Conseco Inc.'s restatement of several years of financial results in 2008, agreeing with the insurer that the suit failed to allege fraud.
The plaintiffs filed a Notice of Appeal from the judgment in the Second Circuit Court of Appeals. The appeal was later withdrawn according to the copy of the Mandate entered on June 20, 2011.