San Francisco, California–(Newsfile Corp. – March 17, 2021) – Hagens Berman encourages Clover Health Investments, Corp. (NASDAQ: CLOV) investors to submit their losses now. A securities fraud class action has been filed and certain investors may have valuable claims.
Clover Health Investments, Corp. (CLOV) Securities Class Action:
The Complaint alleges that, throughout the Class Period, Defendants misrepresented and concealed that: (1) Clover’s Clover Assistant platform was under investigation by the Department of Justice for at least 12 issues ranging from kickbacks to marketing practices to undisclosed third-party deals; (2) the DOJ’s investigation presented an existential risk to Clover because it derives most of its revenues from Medicare; and (3) Clover’s sales were driven by a major undisclosed related party deal and misleading marketing targeting the elderly, not its purported “best-in-class” technology.
Investors allegedly began to learn the truth on Feb. 4, 2021 when Hindenburg Research released a scathing report about the company, alleging Clover’s sales are the product of misleading marketing activities targeting the elderly and a major undisclosed related party deal.
Hindenburg claimed that Clover concealed that the DOJ is actively investigating the company for illegal kickbacks and deceptive marketing practices. Hindenburg alleged that the company uses a subsidiary, Seek Insurance Services, to misleadingly steer seniors toward acquiring Clover plans. Citing accounts from former employees, Hindenburg further stated “that much of Clover’s sales are fueled by a major undisclosed relationship between Clover and [B&H Assurance,] an outside brokerage firm controlled by Clover’s Head of Sales (Hiram Bermudez).”
The next day, Clover admitted it was fully aware of the DOJ inquiry and Bermudez’s ownership in B&H Assurance. The company also revealed that it received a letter from the SEC following Hindenburg’s report.
On this news, the price of Clover shares sharply declined.
“We’re focused on investor losses and whether Clover may have misled investors about the legality of its business practices and related financial reporting,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Clover shares, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding Clover should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30% of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email CLOV@hbsslaw.com.
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