Settlement Proposed in Shareholder Class Action Against Castlight Health
Northern California Record
August 19, 2016
Jonathan Gardner weighs in on the proposed settlement against healthcare information company
Castlight, a health information cloud-based software company, was accused of misstating and omitting material facts in its registration statement ahead of its March 14, 2014, initial public offering (IPO). The lawsuit accused the company, certain directors, and underwriters of allegedly failing to disclose it was experiencing implementation delays and did not reveal it had increased expenses, or details of its inability to maintain pricing on its principal product. The defendants deny all of the plaintiffs' allegations.
Details of the settlement against the San Francisco-headquartered company have been revealed, and it includes Castlight paying aggrieved share buyers $9.5 million. Partner Jonathan Gardner of Labaton Sucharow, who represents the plaintiffs in the case against Castlight, believes those unnamed in the class action will accept the settlement.
“We are very happy with the settlement as it recovers a significant portion of the class’ damages," said Gardner. He added, "We are hopeful and fully expect the class to accept the settlement. As is the case in every settlement in civil litigation, the defendants deny any wrongdoing.”