Robbins Arroyo LLP: Centene Corporation (CNC) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Centene Corporation (NYSE: CNC) in the U.S. District Court for the Central District of California. The complaint is brought on behalf of all purchasers of Centene securities between April 26, 2016 and September 6, 2016, for alleged violations of the Securities Exchange Act of 1934 by Centene’s officers and directors. Centene operates as a diversified and multi-national healthcare enterprise that provides programs and services to under-insured and uninsured individuals in the United States.
Centene Accused of Issuing Inaccurate Financial Information
According to the complaint, on March 24, 2016, Centene acquired Health Net, Inc. (“Health Net”) for approximately $6 billion, including the assumption of debt. In a press release on April 26, 2016, Centene stated, “This acquisition is transformational – building on our critical mass and new products and capabilities that will enhance the sustainability of our long-term growth.” On May 10, 2016, Centene provided financial information concerning the completed acquisition that allegedly incorrectly accounted for Health Net’s underperforming health plans, including by understating certain reserves to account for losses in California, Arizona, and Oregon.
The complaint further alleges that Centene officials failed to disclose: (1) that certain Health Net insurance programs were significantly underperforming; (2) that Health Net’s insurance plans were generating material losses; and (3) that Centene had overstated Health Net’s financial prospects. On July 26, 2016, Centene filed a report with the U.S. Securities and Exchange Commission on Form 8-K, stating that it was reserving approximately $300 million for losses associated with Health Net’s insurance plan. Then, on September 6, 2016, Leerink Partners, LLC issued a report downgrading Centene stock due to underperformance of the Health Net legacy insurance programs, including Health Net’s California substance abuse programs. On this news, Centene’s stock fell $3.32 per share, or 5%, to close at $65.30 per share on September 6, 2016.
Centene Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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