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Case ID: 4469 | Stocks | 10/10/2005
A class action has been filed against AMERIGROUP Corporation (AGP), certain of its officers and directors by stockholders who purchased the company's common stock between April 27, 2005 and September 28, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.
According to a press release dated October 3, 2005, the complaint charges AMERIGROUP and certain of its officers and directors with violations of the Securities Exchange Act of 1934. AMERIGROUP operates as a multi-state managed healthcare company focused on serving people who receive healthcare benefits through publicly sponsored programs, such as Medicaid, State Children's Health Insurance Program and FamilyCare. Specifically, the complaint alleges that during the Class Period, defendants caused AMERIGROUP's shares to trade at artificially inflated levels by issuing a series of materially false and misleading statements regarding the Company's financial statements, business and prospects, specifically by failing to account for at least $23 million in medical costs incurred in prior quarters but not included in the results for those quarters. This caused the Company's stock to trade as high as $49.30 per share during the Class Period. Defendants took advantage of this artificial inflation, selling 170,712 shares of their AMERIGROUP stock for proceeds of $6.1 million. The complaint further alleges that on or around September 28, 2005, after the market closed, the Company issued a press release announcing that "it expects to report a third quarter 2005 loss of $0.06 to $0.08 per diluted share, as compared to current consensus earnings estimate of $0.48 per diluted share. As a result, the Company will not meet its 2005 annual earnings guidance of $1.73 to $1.78 per diluted share. The third quarter results will include additional estimated medical costs related to services performed in prior periods, primarily the first and second quarters of 2005, of approximately $23 million, or $0.26 per diluted share. . . . Third quarter earnings per diluted share, excluding the impact of the prior period development, are estimated to be $0.18 to $0.20 as compared to current consensus earnings estimate of $0.48 per diluted share." On this news, AMERIGROUP's stock fell $14.70 per share to as low as $19.21 per share before closing at $19.81 per share on volume of 8.4 million shares, more than 12 times the daily average. If you bought AMERIGROUP Corporation securities between April 27, 2005 and September 28, 2005, inclusive, and would like to obtain information about the AMERIGROUP Corporation lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest A class action has been filed against cancer information company IMPATH, Inc. (Nasdaq: IMPH) and certain of its officers and directors by stockholders who purchased the company's common stock between April 25, 2001, and July 29, 2003. A class action has been filed against American International Group, Inc. (AIG) : Shelf-Space Funds (AIG), certain of its officers and directors by stockholders who purchased the company's common stock between June 30, 2000 and June 8, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. A class action has been filed against Brocade Communication Systems, Inc. (NasdaqNM:BRCD), certain of its officers and directors by stockholders who purchased the company's common stock between February 21, 2001 and May 15, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. The parties have reached a $100 million administrative settlement in several actions filed against Janus Capital Group, Inc. (NYSE:JNS) and certain of its officers and directors on behalf of shareholders. The agreement between Attorneys General of New York and Colorado, and the Colorado Division of Securities relates to the company’s previously disclosed market timing admissions. Persons eligible to take part in the settlement should contact the prosecuting attorneys. A class action has been filed against Printcafe Software, Inc. (Nasdaq: PCAF) and certain of its officers and directors by stockholders who purchased the company's common stock between June 18 and October 22, 2002. Several class actions have been filed against software provider Nassda Corporation (Nasdaq:NSDA) and certain of its officers and directors by stockholders who purchased the company's common stock between December 13, 2001, and June 11, 2004, including those who acquired their shares pursuant to its initial public offering. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities.
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