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There is a recurring theme regarding corporate irregularities
and shareholder losses. All too often, in the preceding
months before a stock suffers a major drop, the Company
painted a glowing picture about its future prospects.
Investors believed management's story, bought the stock
and the stock rose in value. Meanwhile, the same corporate
insiders who were pushing the stock to the public unloaded
their shares at a huge profit. But when the true condition
of the company was revealed, the stock price plummeted,
and the duped investors suffer significant losses.
The latest example is Universal American Financial Corp
(NasdaqNM: UHCO), a specialty health and life insurance
holding company that provides a broad array of health
insurance and managed care products and services to the
growing senior population. The Company is known
primarily for its Medicare Supplement and Medicare
Advantage products.
Throughout the class period, it is alleged that the Company
deceived the investing public as to its financial
performance and financial condition, specifically statements
regarding its medical loss ratio. Meanwhile, the Company
and Company insiders sold Universal American shares for
proceeds in excess of $200 million.
On October 28, 2005, investors realized the future prospects
of the Company weren't so rosy after the Company
announced a 22% year-over-year decline in net income
resulting from higher medical care costs and expenses.
The market reacted strongly and UHCO stock plummeted
by 33%.
Investors who purchased between February 16, 2005 and
October 28, 2005 are affected.
Troubled IPO - Great Wolf Resorts
Great Wolf Resorts (NASDAQ: WOLF) is an owner, operator
and developer of family resorts that feature indoor
waterparks and other family-oriented entertainment activities.
On December 14, 2004 an IPO for the Company was issued.
But seven months later, the bright prospects of the IPO
unraveled for WOLF investors who relied on its registration
statement and prospectus. It is alleged that Company
insiders were motivated to conceal material problems in
order to sell their personal shares to the unsuspecting public.
On July 28, 2005, the Company announced a disappointing
2nd Quarter EBITDA of $3.3 million, much less than its
previously issued guidance of $7 million. The Company also
disclosed a variety of problems and lowered its earning
guidance for the rest of the year.
Not surprisingly, the stock plummeted on this news,
dropping 31%. Shareholder litigation has been brought
against the Company and certain insiders on behalf of
investors who purchased stock pursuant or traceable to its
IPO or who purchased WOLF between December 14, 2004
and July 28, 2005.
If you are an affected investor in Universal American
Financial Corp, Great Wolf Resorts, or any of the other
companies listed below under investigation, you may wish
to contact us at info@securitiessleuth.com to discuss your
options.
Cases Under Investigation
Interlink Electronics Inc. (NasdaqNM: LINK)
On March 9, 2005, Interlink announced it would restate its
financial results for the first three quarters of 2004 to
correct several instances of improper accounting. Then,
on November 2, 2005, Interlink shocked investors a second
time by announcing it was again restating its financial
statements -- this time for all of 2003 and 2004 and for
the first two quarters of 2005. This news shocked the
market and Interlink shares plummeted 40%. Investors
who purchased LINK between April 24, 2003 and
November 1, 2005, are affected.
Ciphergen Biosystems (NASDAQ: CIPH)
On November 16, 2005, after the close of the market the
Company announced that its Audit Committee had
determined that results in the Quarterly Report for the
quarter ended June 30, 2005 should be restated to recognize
revenue in a manner consistent with the Company’s revenue
recognition policy. The following day, its stock plummeted
more than 20%. Investors who purchased CIPH between
February 17, 2005 and November 16, 2005, may be
affected.
Taro Pharmaceuticals Industries (NASDAQ: TARO).
On November 17, 2005, prior to the opening of the market,
Taro disclosed that it had revised its accounting treatment
for revenue received in the sale of inventory in a three year
contract and its stock declined approximately 34% in heavy
trading. Investors who purchased Taro between
April 26, 2005 and November 17, 2005, may be affected.
First BanCorp (NYSE: FBP)
First BanCorp shareholders recently have seen their stock
tumble as a result of a series of negative developments.
First, the Company announced that it had received a letter
from the SEC indicating that it was conducting an informal
inquiry into the Company. Second, on September 30, 2005,
the Company announced that its President and CEO was
stepping down and its CFO had also resigned her position.
Investors who purchased between March 31, 2003 and
October 25, 2005, are affected.
NL Industries (NYSE: NL)
On November 14, 2005, NL Industries disclosed that it will
restate its financial statement for the year ended
December 31, 2004 and the quarters ended March 31, 2005
and June 30, 2005. Investors who purchased NL stock
between May 4, 2004 and November 14, 2005 may be affected.
Guidant Corp. (NYSE: GDT)
On June 17, 2005, the FDA issued a nationwide recall
notification impacting Guidant's implantable defibrillators
and cardiac resynchronization therapy defibrillators. On
November 3, 2005, the Attorney General of the State of
New York filed a complaint, alleging 'repeated and persistent
fraud' by the Company in connection with its defibrillator
sales. Investors who purchased GDT between
December 15, 2004 and November 3, 2005, are affected.
Motive, Inc. (Nasdaq: MOTV)
On October 27, 2005 the Company announced it would restate
its financial results for the quarters ended March 31, 2005,
and June 30, 2005, and the six-month period ended
June 30, 2005. Investors who purchased MOTV between
April 21, 2005 and June 30, 2005, are affected.
Now with respect to settled cases. If you are an affected
investor – you purchased any of these stocks during the
relevant class period, you may wish to contact the claims
administrator to obtain additional information. Remember,
if you don’t submit your claim form, you won’t receive your
proportionate share of recovery.
Metromedia Fiber Network, Inc. (MFNX)
Class Period: January 8, 2001 to July 2, 2001
Claims Deadline: January 27, 2006
Claims Administrator: Gilardi
Micromuse, Inc. (MUSE)
Class Period: January 18, 2001 to May 17, 2004
Claims Deadline: January 9, 2006
Claims Administrator: A.B. Data
Homestore.com Inc. (HOMS)
Class Period: January 1, 2000 to Decembr 21, 2001
Claims Deadline: December 12, 2005
Claims Administrator: Rust Consulting
Healthtronics Surgical Services (HRTN)
Class Period: January 4, 2000 to July 28, 2003
Claims Deadline: December 31, 2005
Claims Administrator: Garden City
Contact info: info@gardencitygroup.com or 800.327.3664
Quality Distributions, Inc. (QLTY)
Class Period: November 6, 2003 to January 18, 2005
Claims Deadline: December 23, 2005
Claims Administrator: Garden City
Contact info: info@gardencitygroup.com or 800.327.3664
Again, if you are affected by a settled case, then you should
contact the claims administrator (rather than us). However,
if you are an affected investor in any of the companies under
investigation, you many wish to contact us so that you
can consider your options.
Likewise, if you happen to be aware of corporate restatements
or other financial fraud -- especially if you're a victim --
you're encouraged to contribute to the Sleuth by giving your
own tip-offs at www.securitiessleuth.com or by e-mailing
info@securitiessleuth.com. You can also call Mark McNair
at 877-511-4717. If you have a friend or colleague you
think would benefit from The Sleuth, please pass along
this issue and ask them to sign up at
www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
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