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Case ID: 5117 | Stocks | 07/21/2008
According to a press release dated June 5, 2008, the complaint charges Healthways and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Healthways provides disease management and wellness programs for health plans, hospitals and small businesses, helping members with diabetes, cancer and other diseases to coordinate care, keep up with treatment and maintain healthy behaviors.
The complaint alleges that, during the Class Period, defendants issued a series of materially false and misleading statements concerning the Company’s financial performance and prospects. According to the complaint, starting in 2005, Healthways, along with four other companies, became involved in the Medicare Health Support (“MHS”) pilot program launched by the Centers for Medicare & Medicaid Services (“CMS”). The MHS program was designed to improve quality of care and life for people with multiple chronic conditions, and to help the Medicare program and its beneficiaries save money. Under the plan’s first three-year phase, patients were tracked to evaluate care, satisfaction and whether the plan achieved savings targets. Based on those results, CMS would decide whether to expand the program to a second phase. Specifically, the complaint alleges that Healthways failed to disclose that: (i) Healthways was not meeting the savings targets, among other requirements, set by CMS. As a result of Healthways’ failure, CMS would not expand the MHS program to a second phase and the Company would be required to reimburse CMS for the fees they had already received through the program; (ii) Healthways was in danger of losing at least two existing contracts and was experiencing slower enrollment in an existing contract due to a decline in the need for the Company’s services; and (iii) as a result of the foregoing, the Company had no reasonable basis for its revenues and earnings guidance for fiscal 2008. Then, on February 26, 2008, the Company announced that it was lowering its financial guidance for fiscal 2008 “due to slower-than-projected enrollment in a new Health Support program with one large health plan customer and the recent indication that two previously anticipated contracts will not materialize during this fiscal year.” Upon this news, shares of the Company’s stock fell $13.42 per share, or approximately 30%, to close at $31.93 per share, on heavy trading volume.
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 Kahn Gauthier Swick, LLC ("KGS") announces that shareholders of Shuffle Master, Inc. ("Shuffle Master" or the "Company") (Nasdaq:SHFL) who purchased shares of the Company between December 22, 2006 and March 12, 2007 (the "Class Period"), have 59 days, or until August 3, 2007, to move for appointment as Lead Plaintiff in a securities fraud class action lawsuit currently pending in the United States District Court for the District of Nevada. No class has yet been certified in this action.
A class action has been filed against Par Pharmaceutical Companies, Inc. (PRX), certain of its officers and directors by stockholders who purchased the company's common stock between April 29, 2004 and July 5, 2006. 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. On March 31, 2008, several motions were filed by different groups and individuals to be appointed as lead plaintiffs, lead counsels as well as to consolidate cases. A response to the above mentioned motion was filed on April 17, 2008 by SLM Venture. Just as quickly, a memorandum of law in opposition of consolidating cases, to appoint lead plaintiffs and counsels was filed by Sheet Metal Workers Pension Fund Trust at the same time. According to a law firm press release, an institutional investor has filed a class action lawsuit against First American Corporation on behalf of shareholders who purchased the common stock of the Company, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. Sections 78j(b), 78n(a) and 78t(a). Named as defendants are First American, the Company's Chief Executive Office and Chairman of the Board, as well as the Company's Vice Chairman and Chief Financial Officer.
Several class actions have been filed against medical device company Synovis Life Technologies, Inc., (Nasdaq:SYNO) and certain of its officers and directors by stockholders who purchased the company's common stock between October 16, 2003, and May 18, 2004. 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. A class action has been filed against Orphan Medical, Inc. (ORPH), certain of its officers and directors by stockholders. 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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