NEW YORK--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (https://www.rgrdlaw.com/cases-clover-health-investments-corp-class-action-lawsuit.html) today announced that it filed a class action seeking to represent purchasers of Clover Health Investments, Corp. (NASDAQ:CLOV) (formerly known as Social Capital Hedosophia Holdings Corp. III) Class A common stock and warrants to purchase Class A common stock (collectively, the “Securities”) between October 6, 2020 and February 3, 2021 (the “Class Period”). This action was filed in the Middle District of Tennessee and is captioned Yaniv v. Clover Health Investments, Corp., No. 21-cv-00109.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Clover Health Securities during the Class Period to seek appointment as lead plaintiff in the Clover Health class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Clover Health class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Clover Health class action lawsuit. An investor’s ability to share in any potential future recovery of the Clover Health class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff in the Clover Health class action lawsuit, you must move the Court no later than 60 days from February 8, 2021. If you wish to discuss the Clover Health class action lawsuit or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Mary K. Blasy of Robbins Geller, at 800-449-4900 or 631-454-7719 or via e-mail at email@example.com. You can view a copy of the complaint as filed at https://www.rgrdlaw.com/cases-clover-health-investments-corp-class-action-lawsuit.html.
The Clover Health class action lawsuit charges Clover Health and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Clover Health is a health insurance service company that provides Medicare Advantage health plans. Clover Health began the process of going public during the summer of 2020, ultimately merging with Social Capital Hedosophia Holdings Corp III, an already publicly listed special-purpose acquisition company (“SPAC”).
The complaint alleges that Clover Health’s statements throughout the Class Period, including in the registration statement used to complete the SPAC transaction, omitted facts required to make its other statements not misleading and failed to comply with Items 303 and 503 of Regulation S-K. Specifically, the registration statement failed to disclose that Clover Health was subject to an ongoing investigation by the U.S. Department of Justice (“DOJ”), including its software “Clover Assistant” purportedly designed to serve “low-income and often overlooked communities,” as well as kickbacks, marketing practices, and undisclosed third-party deals.
With the price of Clover Health Securities trading at fraud-inflated prices based on their false and misleading statements, Clover Health’s senior officers and directors, including all but one of the defendants, along with certain other venture capital financiers, took steps to cash-in, filing an additional registration statement with the SEC that would register for resale and permit them to sell hundreds of millions of their personally held Clover Health Securities at fraud-inflated prices. Once again, the registration statement filed with the SEC to permit the insiders and venture capital financiers to cash out their shares omitted facts required to make its other statements not misleading and failed to comply with Items 303 and 503 of Regulation S-K.
On February 4, 2021, stock investment firm Hindenburg Research disclosed the existence of the ongoing DOJ investigation by publishing an investigative report entitled “Clover Health: How the ‘King of SPACs’ Lured Retail Investors Into a Broken Business Facing an Active, Undisclosed DOJ Investigation.” Among other things, according to Hindenburg, prior to the merger, Clover Health had received a civil investigative demand letter from the DOJ “and the corresponding investigation present[ed] a potential existential risk for a company that derives almost all of its revenue from Medicare, a government payor.” Hindenburg also described a relationship between Clover Health and its subsidiary Seek Insurance as “thinly disclosed,” noting that it did not mention the subsidiary on its website yet told seniors that it would provide them with unbiased information on finding Medicare plans. On this news, the price of Clover Health Securities fell more than 12%, damaging investors.
The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.