NEW YORK, April 30, 2018 (GLOBE NEWSWIRE) -- Labaton Sucharow LLP (“Labaton Sucharow”) announces that on April 27, 2018, it filed a securities class action lawsuit on behalf of its client Steamfitters Local 449 Pension Plan (“Steamfitters 449”) against Molina Healthcare, Inc. (“Molina” or the “Company”) (NYSE:MOH), and certain of its senior executives (collectively, “Defendants”). The action, which is captioned Steamfitters Local 449 Pension Plan v. Molina Healthcare, Inc., No. 18-cv-03579 (C.D. Cal.), asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), and U.S. Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder, on behalf of all persons or entities who purchased or otherwise acquired Molina common stock between October 31, 2014 and August 2, 2017, inclusive (the “Class Period”).
Molina is a managed care company, focused on 4.5 million members eligible for Medicaid, Medicare, and other government-sponsored healthcare programs. Molina’s health plans are operated by various wholly-owned subsidiaries, each of which is licensed as a health maintenance organization (HMO).
During the Class Period, Molina misled investors regarding the scalability of its existing administrative infrastructure. Molina executives falsely claimed that the Company’s existing administrative infrastructure could support rapid growth into existing Medicaid markets and new Patient Protection and Affordable Care Act health insurance marketplaces (“ACA Health Exchanges”) in a cost-effective manner. Molina later admitted that its existing administrative infrastructure was built for a “much smaller, simpler business” and was “never” designed to support the Company’s growth strategy.
The truth regarding Molina’s failed growth strategy and inadequate administrative infrastructure was revealed through a series of disappointing financial results, culminating on August 2, 2017, when the Company reported a net loss of $230 million for the quarter, termination of its ACA Health Exchange participation in Utah and Wisconsin, and a major restructuring plan. During the related earnings call, Molina revealed that its administrative infrastructure was never designed to sustain such rapid growth. On this news, Molina’s common stock price fell $3.92 per share, or 5.92 percent, to close at $62.32 per share on August 3, 2017.
If you purchased or acquired Molina common stock during the Class Period, you are a member of the “Class” and may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the U.S. District Court for the Central District of California no later than June 29, 2018. The Lead Plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as Lead Plaintiff to share in any Class recovery in this action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in this action.
If you would like to consider serving as Lead Plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton Sucharow, at (800) 321-0476, or via email at fmcconville@labaton.com. You can view a copy of the complaint online at, http://www.labaton.com/en/cases/Steamfitters-Local-449-Pension-Plan-v-Molina-Healthcare-Inc.cfm.
Steamfitters 449 is represented by Labaton Sucharow, which represents many of the largest pension funds in the United States and internationally with combined assets under management of more than $2 trillion. Labaton Sucharow’s litigation reputation is built on its half-century of securities litigation experience, more than 60 full-time attorneys, and in-house team of investigators, financial analysts, and forensic accountants. Labaton Sucharow has been recognized for its excellence by the courts and peers, and it is consistently ranked in leading industry publications. Offices are located in New York, NY, Wilmington, DE, Washington, D.C., and Chicago, IL. More information about Labaton Sucharow is available at www.labaton.com.
Source: Labaton Sucharow LLP