ORN Lawsuit; ORN Class Action

Class Action Reports

Levi & Korsinsky Announce CVS Class Action; CVS Lawsuit

Levi & Korsinsky, LLP

March 14, 2019

Anarkat v. CVS Health Corporation, et al 1:19-cv-01725-AT — On February 25, 2019, investors sued CVS Health Corporation (“CVS Health” or the “Company”) in United States District Court, Southern District of New York. Plaintiffs in the CVS class action allege that they acquired CVS Health stock at artificially inflated prices between May 21, 2015 and February 20, 2019 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information on the CVS Lawsuit, please contact us today!

Summary of the Allegations

Company Background

The Company (NYSE: CVS) bills itself as the largest pharmacy health care provider in the United States.

As such, CVS Health says it has more than 9,800 retail locations in 49 states, the District of Columbia, Puerto Rico and Brazil. The Company also says CVS Pharmacy serves 5 million customers per day and that it has managed or filled 2.5 billion prescriptions. According to its website, CVS Health employs approximately 290,000 people

The Company is headquartered in Woonsocket, Rhode Island, and its history dates to 1892. It was known as CVS Caremark Corporation until it adopted its current moniker in 2014.

In 2015, the Company acquired Omnicare, Inc., (“Omnicare”), a “provider of pharmaceuticals and related pharmacy services to long-term care facilities and a provider of specialty pharmacy and commercialization services for the bio-pharmaceutical industry.”

The Company’s claims and failure to disclose certain information about the acquisition are at the crux of the February 25 complaint.

Summary of Facts

CVS Health and two of its senior officers (the “Individual Defendants”) are now accused of deceiving investors by lying and withholding critical information about the Company’s business practices, operations and compliance policies during the Class Period.

Specifically, they are accused of withholding truthful information about CVS Health’s financial condition and expected earnings from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused the Company’s stock to trade at artificially inflated prices during the time in question.

The truth came out when the Company released its fourth quarter and full year financial and operating results on February 20, 2019. At that time, the Company also provided 2019 full year guidance. In that context CVS Health revealed that its adjusted earnings in 2019 would fall short of market estimates and cited “rising costs and poor results related to the Company’s 2015 acquisition of Omnicare.”

Fortune and The Motley Fool also published articles about the issue that day.

A closer look…

As alleged in the February 25 complaint, CVS Health and/or the Individual Defendants repeatedly made false and misleading public statements during the Class Period.

For example, in a press release about the acquisition issued at the beginning of the Class Period, the Company stated in pertinent part: “With the acquisition of Omnicare, CVS Health will significantly expand its ability to dispense prescriptions in assisted living and long term care facilities, serving the senior patient population.”

Then, on a form filed with the SEC on February 9, 2016, the Company also discussed the Omnicare acquisition stating in relevant part: “On August 18, 2015, we completed our acquisition of Omnicare, broadening our base of pharmacy care to a new dispensing channel, long-term care pharmacy.”

The Company reiterated that statement on forms filed with the SEC on February 9, 2017 and February 14, 2018.”

Impact of the Alleged Fraud on CVS Health’s Stock Price and Market Capitalization

Closing stock price prior to disclosures:

 

$69.88
Closing stock price the trading day after disclosures:

 

$64.22
One day stock price decrease (percentage) as a result of disclosures:

 

8.10%

The following chart illustrates the stock price during the class period:

 CVS Class Action CVS Lawsuit 1

Actions You May Take

If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.

NOTE: The deadline to file for lead plaintiff in this class action is April 26, 2019. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.

In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in CVS Health common stock using court-approved loss calculation methods.

Recently Filed Cases

Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action.  Please contact us if you would like an LK report for any of these cases:

CVS Class Action CVS Lawsuit

About Us

Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse.  With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.

Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients.  Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.

For additional information about this case or our institutional services, please contact us.