Labaton Sucharow Files Securities Class Action on Behalf of Maximus, Inc. Investors
NEW YORK (August 7, 2017) – On August 4, 2017, Labaton Sucharow LLP filed a securities class action lawsuit on behalf of Steamfitters Local 449 Pension Plan against Maximus, Inc. (Maximus or the company), and certain of its senior executives (collectively, the defendants). The action, Steamfitters Local 449 Pension Plan v. Maximus, Inc., No. 17-cv-00884 (E.D. Va.), asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and U.S. Securities and Exchange Commission (SEC) Rule 10b-5 promulgated thereunder, on behalf all persons or entities who purchased or otherwise acquired Maximus common stock between October 30, 2014 and February 3, 2016, inclusive (the class period).
On October 29, 2014, the United Kingdom Department for Work and Pensions awarded Maximus a significant contract to carry out health and disability benefits, called the Health Assessment Advisory Service (HAAS), over a period of three and a half years. The complaint alleges that during the class period, despite encountering problems from the start, the defendants assured investors that Maximus was meeting targets concerning the HAAS contract.
During the class period, the defendants made false and/or misleading statements and/or failed to disclose that: 1) in obtaining the HAAS contract, Maximus set an unattainable target number of healthcare professionals to recruit and an unattainable target number of assessments; 2) throughout the HAAS contract, Maximus was struggling to recruit, train, and ramp-up new health care staff to perform the assessments; 3) the inability to meet its target number of healthcare recruits and target number of assessments meant Maximus would not earn the performance-based incentive fees from the HAAS contract; and 4) consequently, the defendants’ statements about the company, its financial condition, and the outlook for its business, including statements about the HAAS contract and the amount of revenue Maximus expected the contract to contribute, lacked a reasonable basis when made.
Maximus issued a press release on February 4, 2016, announcing its earnings for the first quarter of fiscal year 2016, again missing expectations and confirming its inability to meet HAAS contract assessment targets. The reduced earnings were based in part on weak performance of the HAAS contract, which “tempered operating margin.” On this news, shares of Maximus common stock dropped $5.53 per share over two trading sessions, or 10.5 percent.
If you purchased or acquired Maximus common stock during the class period, you are a member of the class and may be able to seek appointment as the lead plaintiff. Lead plaintiff motion papers must be filed with the U.S. District Court for the Eastern District of Virginia no later than October 6, 2017. The lead plaintiff is a court-appointed representative for absent members of the class. You do not need to seek appointment as the lead plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action.
If you would like to consider serving as lead plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton Sucharow, at (800) 321-0476, or via email at firstname.lastname@example.org. You can view a copy of the complaint online here.