HARTFORD, Connecticut (Legal Newsline) - An investor is suing Cigna and certain of its top officials, alleging they made false statements to investors about the company's business.
Jyotindra Patel, individually and for all others similarly situated, filed a lawsuit Feb. 4 in U.S. District Court for the District of Connecticut against Cigna Corp., David M. Cordani and Thomas A. McCarthy, alleging violations of the Securities Exchange Act.
According to the complaint, on Jan. 22, premarket, Cigna disclosed the Department of Health & Human Services Centers for Medicare & Medicaid Services (CMS) intended to impose sanctions to suspend enrollment of and marketing to new customers of all Cigna Medicare advantage and standalone prescription drug plan contracts.
The suit alleges Cigna failed to disclose that CMS was imposing these sanctions because, over the last few years, Cigna's appeals and grievances procedures were not in compliance with federal standards and that Cigna's noncompliance with federal standards posed a threat to the health and safety of Medicare beneficiaries.
On this news, Cigna stock fell by $4.28 in two days, resulting in significant losses for Patel and others in the class.
Patel and other class members seek damages, interests, attorney fees, expert fees and other costs. They are represented by attorneys Matthew L. Tuccillo, Jeremy A. Lieberman, J. Alexander Hood, II, and Patrick V. Dahlstrom of Pomerantz LLP in New York City and Chicago.
U.S. District Court for the District of Connecticut Case number 3:16-CV-00182-VLB