WellCare Health Plans Inc. may have misled investors about its financial results and business operations, which came to light when the FBI, HHS and state attorney general's office executed a search warrant on WellCare's corporate offices.
This is a securities fraud class action lawsuit against WellCare Health Plans Inc., its Chief Executive Officer, President and Chairman of its Board of Directors,its Chief Financial Officer and Senior Vice President.
WellCare provides managed-care plans for 2.3 million Medicare and Medicaid participants nationwide.
On October 24, 2007, state and federal law-enforcement agents armed with a federal search warrant raided WellCare's Tampa, Florida headquarters. Agents from the Federal Bureau of Investigation, the Health and Human Services Department and the Florida attorney general's Medicaid fraud unit participated in the raid.
The class action complaint filed against WellCare alleges that at all times during the Class Period:
(1) WellCare had propped up WellCare's results by manipulating WellCare's accounting for revenues and income, and failed to report proper expenses and other material information about WellCare;
(2) unbeknownst to investors, WellCare had materially overstated WellCare's profitability by failing to properly account for WellCare's health care expenses and results of operations and by artificially inflating its financial results;
(3) it was also not true that WellCare contained adequate systems of internal operational or financial controls, such that WellCare's reported financial statements were true, accurate or reliable;
(4) as a result of the foregoing, it also was not true that WellCare's financial statements and reports were prepared in accordance with GAAP ad SEC rules.
Following the news of the raid on WellCare's headquarters, the New York Stock Exchange subsequently halted trading of shares in WellCare. WellCare's shares fell $7.10, or 5.8%, to $115.17 per share at market close on October 24, 2007. Then, on October 25, 2007, when shares resumed trading, shares opened at approximately $64.00 per share, before reaching an intra day low of $27.50 and closing at $42.67.
Name (Stock Symbol)
WellCare Health Plans, Inc. (WCG)
WellCare Health Plans, Inc. provides managed care services for government-sponsored health care programs in the United States.
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