LITTLE ROCK, Ark., Dec. 17, 2002 (PRIMEZONE) -- The deadline for purchasers of CIGNA Corporation ("CIGNA" or the "Company") (NYSE:CI) publicly traded securities to move for lead plaintiff in a securities fraud class action recently brought against the Company is rapidly approaching according to The Law Offices of Cauley Geller Bowman & Coates, LLP.
If you purchased CIGNA publicly traded securities between May 2, 2001 and October 24, 2002, inclusive (the "Class Period") and you wish to be a lead plaintiff in the case, you must move to serve as lead plaintiff by filing a motion in the United States District Court for the Eastern District of Pennsylvania by December 24, 2002. A copy of the complaint filed in this action is available from the Court, or can be viewed on the firm's website at http://www.cauleygeller.com/library/user_images/cigna.pdf.
The complaint, filed by a client of Cauley Geller, charges CIGNA; H. Edward Hanway, Chief Executive Officer, President and Chairman of the Board; James G. Stewart, Chief Financial Officer and Executive Vice President; and James A. Sears, Chief Accounting Officer, with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that throughout the Class Period, Defendants issued press releases announcing CIGNA's quarterly and annual results of operations and filed reports with the SEC, which reported its financial performance and seemingly impressive earnings growth and represented that operating income in 2002 was expected to be $1.1 billion.
CIGNA's representations issued during the Class Period were materially false and misleading when made because they failed to disclose that CIGNA had failed to adequately reserve (by at least hundreds of millions of dollars) for its obligations under the Guaranteed Minimum Death Benefits ("GMDB") reinsurance that it had provided, thereby artificially inflating its earnings and net worth and its projected income figure was lacking in any reasonable basis when made.
Furthermore, on September 3, 2002, after the market closed, CIGNA issued a press release announcing that it has instituted a program "to manage run-off reinsurance exposure" for its GMDB obligations, requiring it to take a $720 million after-tax ($1.1 billion pre-tax) charge. In reaction to the announcement, the price of CIGNA common stock dropped by 10% during the day, closing at $82.65 on September 3, 2002, down from an August 30, 2002 (the previous trading day) close of $85.12 per share.
On September 4, 2002, Standard & Poor's Rating Services issued a press release announcing that it had placed CIGNA's A+ counterparty credit rating and CIGNA's financial strength ratings on CreditWatch with negative implication. In reaction to this announcement, the price of CIGNA common stock dropped 6%, closing at $80 per share on September 4, 2002, down from $85.12 on August 30, 2002. On October 18, 2002, CIGNA issued a press release announcing that it was taking an additional $315 million charge relating to a decision handed down in the Unicover arbitration. Together with the charge for the GMDB obligations, CIGNA's write downs relating to its discontinued reinsurance business, topped one billion dollars for the third quarter.
Finally, on October 24, 2002, the Company announced that, contrary to its recent affirmations, it would not meet its third quarter and Year 2002 guidance - even excluding the recent $720 million and $315 million charges. In reaction to this 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 extreme heavy trading.
If you bought CIGNA publicly traded securities between May 2, 2001 and October 24, 2002, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than December 24, 2002. If you are a member of this class, you can join this class action online at http://cauleygeller.com/template8.asp?pcode=6&pp=1. Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Cauley Geller is a national law firm that represents investors and consumers in class action and corporate governance litigation. It is one of the country's premiere firms in the area of securities fraud, with in-house finance and forensic accounting specialists and extensive trial experience. Since its founding, Cauley Geller has recovered in excess of two billion dollars on behalf of aggrieved shareholders. The firm maintains offices in Boca Raton, Little Rock, and San Diego.
If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's website at www.cauleygeller.com.
CAULEY GELLER BOWMAN & COATES, LLP Client Relations Department: Jackie Addison, Heather Gann or Sue Null P.O. Box 25438 Little Rock, AR 72221-5438 Toll Free: 1-888-551-9944 E-mail: info@cauleygeller.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca