Updated: May 24, 2018
Status: Ongoing Case
On May 17, 2016, Labaton Sucharow was appointed lead counsel in a securities class action against Cigna, Inc. (“Cigna”), one of the nation’s largest healthcare providers. A Second Amended Complaint was filed on November 30, 2016. The District Court granted defendants motion to dismiss on September 28, 2017, which the plaintiff appealed to the Second Circuit. The appeal has been fully briefed and argued, and plaintiff awaits the court’s decision.
The complaint alleges that, throughout the class period, the defendants made materially false and misleading statements regarding the company’s business, operational, and compliance policies. Specifically, the lead plaintiff alleges that the defendants made false and/or misleading statements and/or failed to disclose that: Cigna’s appeals and grievances procedures were not in compliance with federal standards; and Cigna’s noncompliance with federal standards posed a serious threat to the health and safety of Medicare beneficiaries.
On January 22, 2016, the truth was revealed when Cigna filed a Form 8-K with the SEC disclosing that the Department of Health & Human Services Centers for Medicare & Medicare Services had notified the company of its intent to impose intermediate sanctions suspending the enrollment of and marketing to new customers of all Cigna Medicare Advantage and Standalone Prescription Drug Plan Contracts, effective immediately. As a result, the value of Cigna’s stock declined significantly.
The case is Patel v. Cigna Corp., No. 16-cv-00182 (D. Conn.). Labaton Sucharow represents lead plaintiff Minohor Singh. The defendants are Cigna Corp., Cigna’s Chief Executive Officer, David M. Cordani, Cigna’s Chief Financial Officer and Executive Vice President, Thomas A. McCarthy, and President of Cigna-Healthspring, Herbert A. Fritch.