Stockholders v Coventry Health Care, Inc.
Stockholders File Lawsuit Against Coventry Health Care, Inc.
According to a press release dated September 03, 2009, The complaint alleges that, throughout the Class Period, defendants made numerous positive statements regarding the Company's financial condition, business and prospects. The complaint further alleges that these statements were materially false and misleading because defendants failed to disclose the following adverse facts, among others: (i) that the Company employed under-pricing strategies to create the appearance that its new Medicare Private-Fee-For-Service (PFFS) initiative was capable of driving the high growth necessary to offset Coventrys contracting Commercial business; (ii) that the Company failed to disclose the true risks associated with its under-pricing strategies, including the fact that Coventry was generating new Medicare PFFS membership at the expense of profit margins and profitability; (iii) that the true negative effects of the Companys under-pricing strategies were masked by improper claims assumptions that materially understated Coventrys healthcare claim expenses; (iv) that Coventrys disclosure and internal controls representations, and defendants certifications thereon, were materially false and misleading when made; (v) and that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and earnings guidance during the Class Period.
On October 21, 2008, Coventry issued a press release announcing its financial results for its third quarter of 2008, the period ended September 30, 2008. In response to this announcement, the price of Coventry common stock declined from $28.49 per share to $13.93 per share, or more than 51%, on very heavy trading volume.
If you bought Coventry Health Care, Inc. securities and would like to obtain information about the Coventry Health Care, Inc. lawsuit, then you are invited to call Kahn Swick & Foti, LLC toll free at (866) 467-1400 extension 100 to speak with an attorney or visit www.ksfcounsel.com.
