CHICAGO, Oct. 29, 2002 (PRIMEZONE) -- Much Shelist Freed Denenberg Ament & Rubenstein, P.C. announces that a class action lawsuit is pending in the United States District Court for the Eastern District of Pennsylvania on behalf of purchasers of the securities of CIGNA Corporation (NYSE:CI) ("CIGNA" or the "Company") between May 2, 2001 and October 24, 2002, inclusive ("Class Period").
It has been alleged that CIGNA, H. Edward Hanway (CEO, President and Chairman), James G. Stewart (CFO) and James A. Sears (Chief Accounting Officer) violated the federal securities laws by issuing a series of materially false and misleading statements to the market, causing the market price of CIGNA securities to be artificially inflated.
Much Shelist is currently investigating these claims. If you wish to discuss your rights and interests, or if you have information relevant to the lawsuit, you may contact Carol V. Gilden or Michael E. Moskovitz at Much Shelist Freed Denenberg Ament & Rubenstein, P.C., by calling a toll-free number 1-800-470-6824, or by sending an e-mail to investorhelp@muchshelist.com. Your e-mail should refer to CIGNA.
According to the complaint, CIGNA issued numerous press releases, and filed financial reports with the SEC, regarding its performance during the Class Period. The releases and filings represented that the Company was experiencing strong growth, that its operating income for 2002 is expected to be $1.1 billion and that its liabilities on its discontinued reinsurance operations were not expected to be material to its liquidity. The complaint further alleges that these, and other, representations were materially false and misleading because they failed to disclose that CIGNA had been under-reserving for its reinsurance obligations, particularly for its reinsurance of guaranteed minimum death benefits ("GMDB"), by (at least) hundreds of millions of dollars. In addition, according to the complaint, the statements were materially false and misleading because CIGNA was experiencing declining demand for its offerings, particularly in its Employee Health Care, Life and Disability segment, and its income guidance for 2002 was lacking in any reasonable basis when made. The Complaint further alleges that defendants engaged in the conduct alleged therein because CIGNA was planning to, and on October 16, 2002, did, issue $250 million of 6 3/8% notes and that the offering would have been negatively affected if the truth regarding CIGNA's business and financial condition was known.
On September 3, 2002, after the market closed, CIGNA issued a press release announcing that it will take a $720 million after-tax ($1.1 billion pre-tax) charge in order to manage its GMDB liabilities, but reaffirmed its previously issued guidance for 2002. In response, credit ratings agencies Standard & Poor's and Fitch reduced CIGNA's credit rating and CIGNA's stock price dropped by 6%. Then, on October 24, 2002, after the close of trading, CIGNA shocked the market by announcing that, contrary to its recent reaffirmations, it would not meet its 2002 earnings guidance due to weakness in its Employee Health Care, Life and Disability segment. In reaction to the announcement, the price of CIGNA common stock plummeted by 42%, falling from a $63.60 per share close on October 24, 2002 to trade as low as $36.81 per share on October 25, on extremely heavy trading volume.
If you purchased CIGNA securities during the Class Period, and if you meet certain other legal requirements, you may file a motion in the court where the lawsuit has been filed to serve as a lead plaintiff. You must file your motion no later than December 24, 2002.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. Section 78u-4).
Much Shelist's history is one of experience, leadership and results. For more than 25 years, Much Shelist has represented plaintiffs in class action litigation in federal and state courts across the United States. The firm has successfully prosecuted cases involving securities fraud, antitrust violations, consumer fraud, unlawful business practices and insurance company fraud. Under Much Shelist's leadership, class members have obtained judgments and settlements in excess of $4 billion.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca