SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on their investment in Clover Health Investments, Corp. f/k/a Social Capital Hedosophia Holdings Corp. III of Class Action Lawsuit and Upcoming Deadline | #insurance | #seniors | #elderly
NEW YORK, March 31, 2021 /PRNewswire/ — Pomerantz LLP announces that a class action lawsuit has been filed against Clover Health Investments, Corp. f/k/a Social Capital Hedosophia Holdings Corp. III (“SCH”, “Clover”, or the “Company”) (NASDAQ: CLOV; CLOVW) (NYSE: IPOC.U; IPOC; IPOC WS), and certain of its officers and directors. The class action, filed in the United States District Court for the Middle District of Tennessee, and docketed under 21-cv-00138, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Clover securities between October 6, 2020 and February 3, 2021, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Clover securities during the Class Period, you have until April 6, 2021 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
SCH was a publicly-traded blank check company, also known as a special purpose acquisition company (“SPAC”), formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses.
On October 6, 2020, SCH and a private health insurance company, Clover Health Investments, Corp. (“Legacy Clover”), issued a press release announcing their plan to bring Legacy Clover public via a merger between SCH and Legacy Clover (the “Business Combination”). That press release described Legacy Clover as “a next-generation Medicare Advantage insurance company offering best-in-class plans that combine wide access to healthcare and rich supplemental benefits with low out-of-pocket expenses[.]”
Legacy Clover’s (and following the Business Combination, Clover’s) flagship platform, the Clover Assistant, purportedly aggregates millions of relevant health data points—including claims, medical charts, and diagnostics—and uses machine learning to synthesize that data with member-specific information. This purportedly provides physicians with actionable and personalized insights at the point of care, offering suggestions for medications and dosages as well as the need for, among other things, tests or referrals, to ultimately improve health outcomes.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) SCH had performed inadequate due diligence into Legacy Clover prior to the Business Combination, or else ignored and/or failed to disclose multiple red flags concerning Legacy Clover’s business and operations; (ii) since before the Business Combination, Legacy Clover and/or Clover have been under active investigation by the U.S. Department of Justice (“DOJ”) for multiple issues ranging from kickbacks to marketing practices to undisclosed third-party deals; (iii) Legacy Clover’s and/or Clover’s sales were, and/or are, driven in large part by an undisclosed related party deal, misleading marketing targeting the elderly, and other illicit practices; (iv) Defendants overstated the capabilities of the Company’s technology; and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On February 4, 2021, Hindenburg Research (“Hindenburg”) issued a report on Clover entitled “Clover Health: How the ‘King of SPACs’ Lured Retail Investors Into a Broken Business Facing an Active, Undisclosed DOJ Investigation.” Citing “more than a dozen interviews with former employees, competitors, and industry experts, dozens of calls to doctor’s offices, and a review of thousands of pages of government reports, insurance filings, regulatory filings, and company marketing materials,” Hindenburg claimed that “Clover Health and its Wall Street celebrity promoter, Chamath Palihapitiya, misled investors about critical aspects of Clover’s business in the run-up to the company’s SPAC go-public transaction last month.”
Specifically, the Hindenburg report concluded, among other things, that the Company and Clover Assistant “are under active investigation by the [DOJ]” for “at least 12 issues ranging from kickbacks to marketing practices to undisclosed third-party deals”; that “Clover’s sales are driven by a major undisclosed related party deal and misleading marketing targeting the elderly”; that “Clover’s software is primarily a tool to help the company increase coding reimbursement”; that doctors at key Clover providers view Clover Assistant as “embarrassingly rudimentary”, “a waste of . . . time”, and just another administrative hassle to deal with; and that Clover pays physicians “$200 per visit to use the software, twice the normal reimbursement rate for a Medicare visit.”
On this news, Clover’s stock price fell $1.72 per share, or 12.33%, to close at $12.23 per share on February 4, 2021, representing a loss of approximately $700 million in market capitalization. Moreover, shares traded as low as $11.86 per share intraday on February 4, 2021. Additionally, Clover warrants fell $0.18 per warrant, or 5.04%, to close at $3.39 per warrant on February 4, 2021.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext. 7980
SOURCE Pomerantz LLP
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