Shareholder Files Class Action on Behalf of Purchasers of Oxford
Health Plans Inc., NASDAQ:OXHP, Common Stock
PHILADELPHIA--(BUSINESS WIRE)--Nov. 19, 1997--A class action has been filed in the United States District Court for the District of Connecticut on behalf of purchasers of the common stock of Oxford Health Plans Inc. (NASDAQ:OXHP - news) between Nov. 6, 1996 and Oct. 26, 1997, alleging violations of the federal securities laws and common law.
Marketing Day in New York Inc. v. Stephen F. Wiggins, et al. (filed Nov. 5, 1997).
The suit was filed by Marketing Day in New York Inc., a non-profit corporation, who has alleged that it was damaged when it purchased 1,600 shares of Oxford stock on Aug. 15 and 18, 1997, at prices ranging from $73.75 to $75.25. Plaintiff is represented by the law firms of Berger & Montague, P.C. of Philadelphia, and Harris Beach & Wilcox LLP of Milford, Conn., among others.
The defendants in the case are Oxford, Stephen F. Wiggins, its chairman and CEO until August 1997, William M. Sullivan, its president, chief operating officer, and CEO since August 1997, Andrew B. Cassidy, its chief financial officer, Robert M. Smoler, its executive vice president and chief executive officer -- New York Region, David A. Finkel, its vice president, Operations, and Brendan R. Shanahan, its vice president and controller.
The suit alleges that the defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing a series of statements about Oxford's membership level, premium receivables and medical costs which misrepresented and omitted material facts.
For example, plaintiff alleges that the defendants made statements about membership levels and premium receivables which made unreasonable re-enrollment assumptions regarding members whose enrollments had expired and who had not been billed to re-enroll, and inadequately reserved for medical costs which were being sustained by Oxford enrollees.
These problems emerged in the aftermath of the company's conversion of its computer system. Plaintiff alleges that defendants initially hid all reference to the serious problems encountered in the computer system conversion.
When they did acknowledge the problem existed, they misleadingly failed to describe its full impact on the company's financial statements, they issue financial statements which did not disclose the material uncertainties in premium receivables and medical costs, and they misleadingly asserted that the problems had been substantially corrected when that was not the case.
The lawsuit also claims that these statements constituted negligent misrepresentations under Connecticut common law.
Plaintiff alleges that these misrepresentations and omissions caused the market to value Oxford's stock at prices in excess of its true value.
When the company finally began to disclose the true facts regarding its membership, premium receivables and medical costs on Oct. 27, 1997, the stock price fell by over $40.00 per share. The market value of plaintiff Marketing Day in New York Inc.'s Oxford stock has declined by approximately $80,000.
Among other facts cited in support of its claim, plaintiff alleges that defendants' intent to mislead the market is evidenced by the sale by the defendants of substantial percentages of their Oxford common stock at prices which were inflated due to their withholding of material information from th market. Defendants obtaining
proceeds of approximately $55.7 million from these transactions.
Plaintiff seeks to represent all persons, other than the defendants or persons affiliated with them, who purchased Oxford stock between Nov. 6, 1996 and Oct. 26, 1997 and who have been injured thereby. Plaintiff's complaint seeks damages for all class members as measured by the inflation of the stock caused by defendants' misleading
statements and omissions.
As the primary firm to represent itself and the class, plaintiff has selected Berger & Montague, P.C. The Berger firm has extensive experience in securities class action cases, having played lead roles in major cases over the past 25 years which have resulted in recoveries of billions of dollars to investors, including the well-known Boesky/Drexel/Milken cases.
The Berger firm has been widely recognized by courts for the high quality of its legal representation of defrauded investors. The firm also has an extensive practice in the areas of anti-trust, environmental torts, product liability and other complex class actions.
A number of cases have been filed on behalf of purchasers of Oxford stock. However, these cases vary as to the time period covered, the identity of the defendants who have been sued, and the economic stake of the named plaintiffs. Before selecting counsel you may wish to consider these and other matters.
If you purchased Oxford stock between Nov. 6, 1996 and Oct. 26, 1997, and either lost money on the transaction or still hold the stock, you may wish to join in the action to serve as lead plaintiff.
In order to do so, you must meet certain requirements set fourth in the applicable law and file appropriate papers with the Court on or before Dec. 28, 1997. This early notice to class members is being made pursuant to applicable law.
If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact: Stephen A. Whinston or Jacob A. Goldberg at Berger & Montague, P.C., 1622 Locust St., Philadelphia, PA 19103; telephone 888/891-2289 or 215/875-3000, fax No. 215/875-3053; E-mail: INVESTORPROTECT@BM.NET |
