CVS Health Corp. agrees to $48 million settlement for concealing loss
BUSINESS RECORD STAFF Sep 16, 2015 | 7:38 pm
1 min read time
194 wordsAll Latest News, Health and Wellness, InsuranceCVS Health Corp. reached a $48 million settlement of a lawsuit that accused the U.S. drugstore operator of fraudulently concealing a big loss of revenue in its pharmacy benefits management business, culminating in a plunge in its stock price, Reuters reported.
The all-cash settlement with investors led by three Massachusetts public pension funds was disclosed in a Monday filing with the federal court in Providence, R.I.
CVS’ share price tumbled 20.1 percent on Nov. 5, 2009, after the company, then known as CVS Caremark, revealed the loss of contracts representing about $4.5 billion of annual revenue.
Shareholders said this disclosure blindsided them, after CVS officials had repeatedly assured them that the company was doing an excellent job integrating the former Caremark Rx Inc. and retaining clients.
CVS bought Caremark in March 2007 and changed its name to CVS Health last September.
The settlement requires court approval and awaits class-action certification for shareholders from Oct. 30, 2008, to Nov. 4, 2009. CVS denied wrongdoing.
In April 2014, CVS agreed to pay $20 million to settle U.S. Securities and Exchange Commission civil charges related to the pharmacy benefit management business and its accounting for an unrelated acquisition.
Trending News
