BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Clover Health Investments, Corp. (NASDAQ: CLOV, CLOVW) (“Clover Health” or the “Company”) f/k/a Social Capital Hedosophia Holdings Corp. III (NYSE: IPOC) (“Social Capital III”) securities: (1) between October 6, 2020 and February 4, 2021, inclusive (the “Class Period”); and/or (2) pursuant or traceable to the registration statement and prospectus issued in connection with the December 2020 Merger of Clover and Social Capital III (the “Registration Statement”). Clover investors have until April 6, 2021 to file a lead plaintiff motion.
Investors suffering losses on their Clover investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to howardsmith@howardsmithlaw.com.
On February 4, 2021, Hindenburg Research released a report entitled "Clover Health: How the ‘King of SPACs’ Lured Retail Investors Into a Broken Business Facing an Active, Undisclosed DOJ Investigation[.]" The report alleged, among other things, that "Clover has not disclosed that its business model and its software offering, called the Clover Assistant, are under active investigation by the Department of Justice (DOJ), which is investigating at least 12 issues ranging from kickbacks to marketing practices to undisclosed third-party deals."
On this news, the Company’s stock price fell $1.72 per share, or 12.3%, to close at $12.23 per share on February 4, 2021, thereby injuring investors.
On February 5, 2021, Clover issued a response in which it admitted, among other things, that it was aware of the DOJ investigation. The Company also disclosed that it had received a letter from the U.S. Securities and Exchange Commission (“SEC”), indicating that it is conducting an investigation and requesting document and data preservation from January 1, 2020 to the present.
The complaint filed alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) the Company’s Clover Assistant platform was under active investigation by the DOJ for at least 12 issues ranging from kickbacks to marketing practices to undisclosed third-party deals; (2) the DOJ’s investigation presented an existential risk to the Company, since it derives most of its revenues from Medicare; (3) Clover’s sales were driven by a major undisclosed related party deal and misleading marketing targeting the elderly, not its purported “best-in-class” technology; (4) a significant portion of Clover’s sales were by way of an undisclosed relationship between Clover and an outside brokerage firm controlled by Clover’s Head of Sales; and (5) as a result, Defendants' statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
If you purchased Clover securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at www.howardsmithlaw.com.
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