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Case ID: 4567 | Stocks | 12/05/2005
A class action has been filed against Universal American Financial Corporation (UHCO), certain of its officers and directors by stockholders who purchased the company's common stock between February 16, 2005 and October 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 November 22, 2005, the Complaint alleges that defendants violated federal securities laws by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of Universal American securities. Specifically, the complaint alleges that defendants made materially false and misleading statements regarding the Company's medical loss ratio. The medical loss ratio is a very closely watched metric that is an expression of the relation of the cost of health care provided to premium income. An increase in the medical loss ratio means higher expenses relative to premium income, which in turn indicates that the Company is growing less profitable. The Company stated that the profitability of its Medicare Advantage business depended, to a significant degree, on the Company's ability to predict and effectively manage costs related to the provision of healthcare services. State regulations required that the Company monitor its medical loss ratio and the Company claimed to have systems in place that enabled it to do so. Defendants further stated that they were reversing a negative trend in the medical loss ratio. The complaint further alleges that the truth was revealed on or around October 28, 2005, when defendants issue a release that announced a 22% year-over-year decline in net income resulting from higher medical care costs and expenses. On this news, the Company's share price dropped precipitously, by $7.50 per share, or 33%, in regular trading on the Nasdaq National Market ("NASDAQ") exchange, to close at below $15.00 per share. During the Class Period, the Company and Company insiders sold Universal American shares for proceeds in excess of $200 million. Note: Universal American is a specialty health and life insurance holding company that provides a broad array of health insurance and managed care products and services to the growing senior population. The Company's principal health insurance products for the senior market are Medicare Supplement and Medicare Advantage. If you bought Universal American Financial Corporation securities between February 16, 2005 and October 28, 2005, inclusive, and would like to obtain information about the Universal American Financial 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 Centro Properties is fighting a $1 billion-plus joint class actions launched by disgruntled investors who bought in when the stock was riding high, only to find it was near collapse.
The parties have reached a $90 million settlement in an enforcement action filed by the SEC against mutual fund manager Pilgrim Baxter & Associates, Ltd., on behalf of stockholders who purchased the company’s mutual funds between 1996 and December 2001. 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. The parties have reached a tentative $1 million settlement of several class actions filed against Internet gambling operation Gaming Lottery Corporation (formerly Nasdaq: GLCCF) and certain of its officers and directors by stockholders who purchased the company's common stock, or the common stock of Laser Friendly, Inc. between February 1, 1995, and May 24, 1996. 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. To recover under the settlement, a completed proof of claim postmarked no later than February 14, 2004, must be mailed to the claims administrator. The parties have reached a final $10.7 million settlement in several actions filed against online flower delivery business FTD.Com, Inc. and its parent, IOS Brands Corporation, by stockholders who purchased FTD.Com class A common stock between March 1, 2002, and June 27, 2002. The actions claim that the defendants violated federal securities laws by breaching their fiduciary duties in conjunction with the companies’ 2002 reorganization. Persons eligible to take part in the settlement must submit proof of claims forms postmarked no later than May 13, 2004. A class action has been filed against Andrx Corporation (ADRX), certain of its officers and directors by stockholders who purchased the company's common stock between March 9, 2005 and September 5, 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 American Italian Pasta Company (NYSE:PLB), certain of its officers and directors by stockholders who purchased the company's common stock between October 25, 2000 and August 09, 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. |
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