Stockholders v UICI
UICI Stockholders and Market Shocked by Academic Management Services Corporation Losses
Several class actions have been filed against financial services company UICI (NYSE:UCI) and certain of its officers and directors by stockholders who purchased the company's common stock between January 17, 2000, and July 21, 2003. 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 stockholders seek to recover compensatory damages for the loss of value of their stock.
The action alleges that UICI senior officers engaged in a scheme to conceal the company's badly flagging Academic Management Services Corporation (AMS) division to prevent the decline in the price of UICI stock in order to: (1) protect and enhance their executive positions and substantial compensation; (2) sell their shares in the company at artificially inflated prices; and (3) and enhance the value of their personal UICI securities holdings and options. AMS is the largest provider of tuition installment plans in the US, and originates approximately $175 million in student loans per year.
UICI allegedly failed to correctly write down its assets associated with its AMS division. On July 21, 2003, this became apparent when UICI revealed that it would record a charge of at least $65 million because of AMS's losses. This revelation caused trading in the company's stock to be temporarily halted on the New York Stock Exchange. When the stock resumed trading, it plummeted to less than $12 per share, a decline of 45% from its class period high of $21.22 per share.
If you purchased securities issued by UICI during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by July 26, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve as you in this action, or you may choose to do nothing, and remain in the class as a silent member.
