WASHINGTON, Oct. 6 /PRNewswire/ -- The law firm of Finkelstein, Thompson & Loughran announces that a lawsuit seeking class action status has been filed in the United States District Court for the Eastern District of Virginia on behalf of purchasers of AMERIGROUP Corporation ("AMERIGROUP") common stock during the period between April 27, 2005 and September 28, 2005 (the "Class Period"). Finkelstein, Thompson & Loughran is investigating similar claims at this time and welcomes inquiries from potential class members concerning their rights and interests in this matter.
The complaint alleges that during the Class Period, defendants caused AMERIGROUP's shares to trade at artificially inflated levels by issuing a series of materially false and misleading statements regarding the Company's financial statements, business and prospects, specifically by failing to account for at least $23 million in medical costs incurred in prior quarters but not included in the results for those quarters. This caused the Company's stock to trade as high as $49.30 per share during the Class Period. Defendants took advantage of this artificial inflation, selling 170,712 shares of their AMERIGROUP stock for proceeds of $6.1 million.
Thereafter, on September 28, 2005, after the market closed, the Company issued a press release announcing that "it expects to report a third quarter 2005 loss of $0.06 to $0.08 per diluted share, as compared to current consensus earnings estimate of $0.48 per diluted share. As a result, the Company will not meet its 2005 annual earnings guidance of $1.73 to $1.78 per diluted share. The third quarter results will include additional estimated medical costs related to services performed in prior periods, primarily the first and second quarters of 2005, of approximately $23 million, or $0.26 per diluted share .... Third quarter earnings per diluted share, excluding the impact of the prior period development, are estimated to be $0.18 to $0.20 as compared to current consensus earnings estimate of $0.48 per diluted share."
On this news, AMERIGROUP's stock fell $14.70 per share to as low as $19.21 per share before closing at $19.81 per share on volume of 8.4 million shares, more than 12 times the daily average. This was a one-day decline of over 40%.
If you are a member of the class, you may, no later than December 2, 2005, request that the Court appoint you as a lead plaintiff. A lead plaintiff is a class member appointed by the Court to direct the litigation on behalf of the class. Although a class member need not be appointed as a lead plaintiff to receive a proportionate share of any proceeds of the litigation, lead plaintiffs make important decisions that could affect the prosecution of the class claims, including decisions concerning settlement. The securities laws create a rebuttable presumption that the plaintiff with the largest financial interest in the litigation is the most adequate to serve as a lead plaintiff.
With offices in Washington, DC and San Francisco, CA, Finkelstein, Thompson & Loughran has spent almost three decades delivering outstanding representation to institutional and individual clients in connection with securities and other finance-related litigation, and has been appointed as lead or co-lead counsel in dozens of shareholder class actions. Indeed, in the past ten years, the firm has served in leadership roles in cases that have recovered over $1 billion for investors and consumers.
If you have any questions concerning this press release or your rights or interests, please contact Finkelstein, Thompson & Loughran's Washington, DC office at (877) 337-1050, or by email at contact@ftllaw.com.
Finkelstein, Thompson & LoughranCONTACT: Benjamin J. Weir, of Finkelstein, Thompson & Loughran,+1-202-337-8000
Web site: http://www.ftllaw.com/
