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Cases

WellCare Health Plans, Inc. Derivative Litigation for Securities Fraud and Gross Mismanagement

Gardy & Notis, LLP has been appointed by the Court as lead counsel for shareholders of WellCare Health Plans, Inc. (NYSE:WCG) seeking to recoup damages against WellCare's board of directors for permitting the company's former management to enter into non-standardized contracts with medical providers promising substantial premiums above established Medicare and Medicaid fee schedules to artificially increase revenue received from the government, which in turn permitted defendants and other company insiders to engage in $75 million of insider selling at artificially inflated stock prices.

On March 30, 2009, the Court issued an Order denying defendants' motion to dismiss in all respects. The Court found:

"The Complaint describes in detail a scheme whereby the Individual Defendants caused the Company to enter into non-standardized contracts with medical providers promising substantial premiums above established Medicare and Medicaid fee schedules. The Complaint also specifically alleges that Individual Defendants acted with scienter in that they either had actual knowledge of the fraud, or acted with reckless disregard for the truth in failing to ascertain and disclose the true facts even though such facts were available to them. In addition, the Complaint consistently draws a nexus between the Individual Defendants' false and misleading statements and their motive to grossly inflate the Company's financial position while falsely assuring the SEC and the investing public that the Company was being operated in a lawful and proper manner, in order to boost the Company's stock price. The Complaint then supports these allegations through various first-hand accounts by former employees of the Company."

The case is Rosky v. Farha, Case No. 07 Civ. 1952, in the United States District Court for the Middle District of Florida.

For more information regarding the lawsuit or to obtain a copy of the complaint or any Court filings, please contact us.

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