Robbins Geller Rudman & Dowd LLP (https://www.rgrdlaw.com/cases-gohealth-inc-class-action-lawsuit.html) today announced that it filed a class action seeking to represent purchasers of GoHealth, Inc. (NASDAQ:GOCO) Class A common stock pursuant and/or traceable to the registration statement issued in connection with GoHealth’s July 2020 initial public offering (the “IPO”). This action was filed in the Northern District of Illinois and is captioned Hudson v. GoHealth, Inc., No. 20-cv-05593.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased GoHealth Class A common stock pursuant and/or traceable to the registration statement issued in connection with GoHealth’s IPO to seek appointment as lead plaintiff in the GoHealth class action lawsuit. A lead plaintiff acts on behalf of all other class members in directing the GoHealth class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the GoHealth class action lawsuit. An investor’s ability to share in any potential future recovery of the GoHealth class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff in the GoHealth class action lawsuit, you must move the Court no later than 60 days from today. If you wish to discuss the GoHealth class action lawsuit or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Brian E. Cochran of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at [email protected] You can view a copy of the complaint as filed at https://www.rgrdlaw.com/cases-gohealth-inc-class-action-lawsuit.html.
The GoHealth class action lawsuit charges GoHealth, certain of its officers and directors, the private equity sponsor of the IPO and its affiliates, and the underwriters of the IPO with violations of the Securities Act of 1933. GoHealth provides an end-to-end health insurance marketplace that purportedly specializes in matching consumers with Medicare Advantage plans.
On June 19, 2020, GoHealth filed with the SEC a registration statement for the IPO on Form S-1 (the “Registration Statement”), which was used to sell to the investing public 43.5 million shares of GoHealth Class A common stock at $21 per share, for total gross proceeds of $913.5 million.
The complaint alleges that the Registration Statement was negligently prepared and, as a result, contained untrue statements of material fact, omitted material facts necessary to make the statements contained therein not misleading, and failed to make necessary disclosures required under the rules and regulations governing its preparation. Specifically, the Registration Statement failed to disclose that at the time of the IPO: (i) the Medicare insurance industry was undergoing a period of elevated churn, which had begun in the first half of 2020; (ii) GoHealth suffered from a higher risk of customer churn as a result of its unique business model and limited carrier base; (iii) GoHealth suffered from degradations in customer persistency and retention as a result of elevated industry churn, vulnerabilities that arose from the Company’s concentrated carrier business model, and GoHealth’s efforts to expand into new geographies, develop new carrier partnerships and worsening product mix; (iv) GoHealth had entered into materially less favorable revenue sharing arrangements with its external sales agents; and (v) these adverse financial and operational trends were internally projected by GoHealth to continue and worsen following the IPO.
Since the IPO, the price of GoHealth Class A common stock has suffered significant price declines. By September 15, 2020, GoHealth Class A common stock closed at just $12.53 per share – over 40% below the $21 per share price investors paid for the stock in the IPO less than two months previously.
The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.
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Robbins Geller Rudman & Dowd LLP
Brian E. Cochran, 800-449-4900