According to the law firm press release, TriNet is a provider of a comprehensive human resources solution for small to medium-sized businesses, enabling clients to outsource their human resources, or HR, function to one strategic partner. The Company’s HR solutions include services such as payroll processing, human capital consulting, employment law compliance and employee benefits.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s current financial condition and quarterly and year-end revenue and earnings outlook for fiscal 2014 and 2015. Specifically, defendants’ statements during the Class Period were each false and misleading, because defendants knew or deliberately disregarded and failed to disclose the following facts: (a) the Company’s processes and methodologies for analyzing and accruing claims failed to properly account for historical claims trends; (b) the Company’s forecasting process failed to properly incorporate relevant historical and current claims trends; and (c) the Company was experiencing growing claims trends in medical and workers compensation that negatively affected the Company’s current and future business prospects. As a result of these misrepresentations and omissions, TriNet stock traded at artificially inflated prices during the Class Period, reaching a high of $37.88 per share on March 3, 2015.
On March 3, 2015, TriNet announced disappointing fourth quarter fiscal 2014 financial results, missing both its insurance revenue and income expectations due to an increase in large medical claims. On May 5, 2015, TriNet announced its financial results for the first quarter of fiscal 2015, again missing expectations due to higher than expected workers compensation costs. Then on August 3, 2015, the Company issued a press release announcing its second quarter fiscal 2015 financial results. The Company reported financial results that missed both revenue and earnings per share estimates by a wide margin due to another increase in high-volume medical claims. On this news, the Company’s stock price declined 38%, from a close of $26.69 per share on August 3, 2015 to a close of $16.33 per share on August 4, 2015, on high trading volume.
On December 3, 2015, the Court issued an Order appointing lead plaintiff and approving lead counsel. Lead Plaintiff filed a consolidated complaint on February 1, 2016. An amended complaint was filed on April 1.
On January 17, 2017, the Court issued an Order granting in part and denying in part Defendants' Motions to Dismiss. An amended complaint was filed on March 3.
Defendants filed a Motion to Dismiss the Second Amended Complaint on April 17, 2017. On December 18, the Court issued an Order granting the Motion and dismissed the Case without leave to amend. Lead Plaintiff filed a Notice appealing this decision on January 17, 2018. On March 26, 2019, the Court of Appeals affirmed the District Court's decision.