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Eastwood Enterprises LLC, individually and on behalf of all others similarly
situated v. Todd S. Farha, et al.
(United States District Court for the Middle District of Florida)
Securities fraud class action filed on behalf of a class of persons and entities who
purchased or acquired the securities of WellCare Health Plans, Inc. ("WellCare") between
May 8, 2006 and October 25, 2007 (the "Class Period").
On March 11, 2008, the Honorable Susan C. Bucklew, United States District Judge for the Middle District of
Florida, appointed the Teachers' Retirement System of Louisiana, Public School Teachers Pension & Retirement
Fund of Chicago, and Policemen's Annuity and Benefit Fund of Chicago as Co-Lead Plaintiffs and BLB&G as
Co-Lead Counsel for the Class.
On October 24, 2007, more than 200 armed agents from the Federal Bureau of Investigation,
the U.S. Department of Health and Human Services Office of the Inspector General, and the Florida
Attorney General's Medicare Fraud Control Unit descended upon WellCare's Florida headquarters to
execute a search warrant authorizing the seizure of 26 categories of documents concerning WellCare's
operation and accounting for its Medicare and Medicaid managed care business over the past five years.
The raid coincided with a meeting of WellCare's Board of Directors. The agents reportedly questioned
WellCare's directors and senior officers and seized a truckload of documents, BlackBerries, and computers
from WellCare's offices -- including from the offices of its senior management.
In the days following the raid, it became known that the Securities and Exchange Commission,
the Connecticut Attorney General, and the States of New York and Georgia were conducting their
own inquiries into WellCare's business practices. As this news became public, the price of WellCare
common stock precipitously fell from $122.27 per share to $22.04 per share --
a decline of approximately 82% -- on the stock's highest trading volume of the year.
Since the raid, neither the Company nor the government has disclosed any details of the government investigations. WellCare’s
Board of Directors has formed a special committee to conduct an investigation into matters raised as part of the ongoing
government investigations (the “Special Committee”). WellCare has announced that until the Special Committee’s investigation
is complete or substantially complete, WellCare cannot file its Form 10-Q for the quarter ended September 30, 2007, its Form
10-K for the year ended December 31, 2007, and its Form 10-Q for the quarter ended March 31, 2008. Accordingly, we requested
an extension of the time to file the amended complaint, and in an order dated May 7, 2008, the Court extended the deadline to
file the amended complaint until July 9, 2008. BLB&G’s investigation is ongoing.
Firm partner Steven Singer and associates
Laura Gundersheim and
John Rizio-Hamilton are
responsible for prosecuting this action.
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