RADNOR, Pa., July 27 /PRNewswire/ -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Central District of California on behalf of all securities purchasers of Molina Healthcare, Inc. (“Molina Healthcare” or the “Company”) between November 3, 2004 and July 20, 2005, inclusive (the “Class Period”).
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Darren J. Check, Esq.) toll-free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The complaint charges Molina Healthcare, J. Mario Molina, and John C. Molina with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that as the Company aggressively expanded through acquisitions, Molina Healthcare underestimated the financial impact of absorbing new members and failed to close favorable contracts with providers; (2) that as a result of the foregoing the Company experienced significant increases in medical costs; (3) that the Company failed to identify and mitigate the impact of higher-than-expected catastrophic cases and increased maternity costs; and (4) as such, defendants’ positive statements regarding the Company’s outlook were lacking in any reasonable basis when made.
On July 20, 2005, after the market closed, Molina Healthcare slashed its forecast for 2005, blaming rising medical costs, and said it expects a loss in the range of 15 to 20 cents per share for the second quarter. More specifically, Molina Healthcare cut its earnings forecast to 73 cents to 80 cents per share for the full year, from a prior $2.40 to $2.45 per share. On news of this, shares of Molina Healthcare fell $20.00 per share, or 43.48 percent, to close at $26.00 per share on unusually heavy trading volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com.
If you are a member of the class described above, you may, not later than September 26, 2005 move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Schiffrin & Barroway, or other counsel of your choice, to serve as your counsel in this action.
CONTACT: Schiffrin & Barroway, LLP Marc A. Topaz, Esq. Darren J. Check, Esq. 280 King of Prussia Road Radnor, PA 19087 1-888-299-7706 (toll-free) or 1-610-667-7706 Or by e-mail at info@sbclasslaw.com
Schiffrin & Barroway, LLP
CONTACT: Schiffrin & Barroway, LLP: Marc A. Topaz, Esq. or Darren J.Check, Esq., +1-888-299-7706, +1-610-667-7706, info@sbclasslaw.com
Web site: http://www.sbclasslaw.com/