SOURCE: Stull, Stull & Brody

September 08, 2009 15:42 ET

Stull, Stull & Brody Announces Class Action on Behalf of Shareholders of Coventry Health Care, Inc.

NEW YORK, NY--(Marketwire - September 8, 2009) - Attorney Advertising. Notice is hereby given that a class action has been commenced in the United States District Court for the District of Maryland on behalf of purchasers of securities of Coventry Health Care, Inc. ("Coventry" or the "Company") (NYSE: CVH) between February 9, 2007 and October 22, 2008, inclusive (the "Class Period").

Stull, Stull & Brody has substantial experience representing employees who suffered losses from purchases of their employer's stock in their 401(k) plans. If you bought Coventry stock through your Coventry retirement account and have information or would like to learn more about these claims, please contact us.

The complaint charges Coventry and certain of its executives with violations of the Exchange Act. Coventry operates as a managed healthcare company in the United States. The Company operates health plans, insurance companies, and network rental and workers compensation services companies.

The complaint alleges that, throughout the Class Period, defendants made numerous positive statements regarding the Company's financial condition, business and prospects. The complaint further alleges that these statements were materially false and misleading because defendants failed to disclose the following adverse facts, among others: (i) that the Company employed under-pricing strategies to create the appearance that its new Medicare Private-Fee-For-Service ("PFFS") initiative was capable of driving the high growth necessary to offset Coventry's contracting Commercial business; (ii) that the Company failed to disclose the true risks associated with its under-pricing strategies, including the fact that Coventry was generating new Medicare PFFS membership at the expense of profit margins and profitability; (iii) that the true negative effects of the Company's under-pricing strategies were masked by improper claims assumptions that materially understated Coventry's healthcare claim expenses; (iv) that Coventry's disclosure and internal controls representations, and defendants' certifications thereon, were materially false and misleading when made; (v) and that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and earnings guidance during the Class Period.

On October 21, 2008, Coventry issued a press release announcing its financial results for its third quarter of 2008, the period ended September 30, 2008. In response to this announcement, the price of Coventry common stock declined from $28.49 per share to $13.93 per share, or more than 51%, on very heavy trading volume.

Plaintiff seeks to recover damages on behalf of himself and all other individual and institutional investors who purchased Coventry securities between February 9, 2007 and October 22, 2008, excluding defendants and their affiliates.

If you purchased Coventry securities between February 9, 2007 and October 22, 2008, you may, not later than November 3, 2009, request that the Court appoint you as lead plaintiff for the class. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation, and you must meet certain legal requirements to serve as a lead plaintiff.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Stull, Stull & Brody. Stull, Stull & Brody has litigated many class actions for violations of securities laws on behalf of defrauded investors over the past 40 years and has obtained court approval of substantial settlements on numerous occasions. Stull, Stull & Brody has offices in New York and Los Angeles. The Stull, Stull & Brody website (www.ssbny.com) has more information about the firm.

Attorney Advertising. Prior Results Do Not Guarantee A Similar Outcome.

Contact Information

  • Contact:
    Tzivia Brody, Esq.
    Stull, Stull & Brody
    SSBNY@aol.com
    toll-free 1-800-337-4983
    fax 212/490-2022
    Stull, Stull & Brody
    6 East 45th Street
    New York, NY 10017