In March 2007, CVS Corp., the nation's largest retail pharmacy chain, and Caremark Rx Inc., the nation's second largest prescription benefits manager (PBM), announced a historic merger. The merger's success hinged almost exclusively on CVS Caremark's ability to integrate Caremark's PBM business into the new entity. By November 2007, CVS Caremark executives announced that the integration among CVS and Caremark had been completed and that CVS Caremark was "operating as one company."

In reality, however, the PBM side of CVS Caremark was never properly integrated, and the failed integration led directly to pervasive customer service problems throughout the Class Period (October 30, 2008 through November 4, 2009). As a result, by no later than 2008, many large PBM clients began abandoning CVS Caremark due to poor service attributable to the integration issues. For instance, Coventry Health Care terminated contracts worth over $4 billion annually and Horizon Blue Cross Blue Shield of New Jersey terminated its contract worth as much as $1.3 billion annually. 

On November 5, 2009, the day investors learned that these customers terminated their relationships with CVS Caremark due to poor service and integration failures, CVS Caremark's share price collapsed 20 percent. Before the price drop, however, and before the truth was revealed, CVS Caremark's CEO, CFO, and the head of its PBM business cashed out over $40 million in CVS Caremark stock for their personal profit.

On March 1, 2010, the United States District Court for the District of Rhode Island appointed,as lead plaintiffs, the Plymouth County Retirement System, the Norfolk County Retirement System, and City of Brockton Retirement System; and appointed Labaton Sucharow LLP as Co-lead Counsel. On May 3, 2010, Lead Plaintiffs filed the Consolidated Class Action Complaint alleging securities fraud against CVS Caremark, Thomas Ryan, current CEO; David Rickard, former CFO; and Howard McLure, former head of the PBM business.  The Complaint was filed on behalf of all persons or entities that purchased or otherwise acquired CVS Caremark shares during the Class Period. A copy of the consolidated complaint is attached here.

Labaton Sucharow partners Joseph Fonti and Stephen Tountas oversee the prosecution of the case.