SAN FRANCISCO, CA / ACCESSWIRE / February 6, 2021 / Hagens Berman encourages Clover Health Investments, Corp. (NASDAQ:CLOV) investors to submit their losses now. The firm is investigating possible securities fraud and certain investors may have valuable claims.
Clover Health Investments, Corp. (CLOV) Investigation:
The investigation concerns whether Clover engaged in illegal sales and marketing activities.
Prior to and since going public through a "blank check company," Clover has promoted its Medicare insurance sales growth, touting its "best-in-class" software platform Clover Assistant as the driver.
But on Feb. 4, 2021, Hindenburg Research released a scathing report about the company, alleging Clover's sales are instead the product of misleading marketing activities targeting the elderly and a major undisclosed related party deal.
Specifically, Hindenburg claims that Clover has concealed that the DOJ is actively investigating the company for illegal kickbacks and deceptive marketing practices. Hindenburg also alleges that the company uses a subsidiary, Seek Insurance Services, to misleadingly steer seniors toward acquiring Clover Health plans. Citing accounts from former employees, Hindenburg further states "that much of Clover's sales are fueled by a major undisclosed relationship between Clover and [B&H Assurance,] an outside brokerage firm controlled by Clover's Head of Sales (Hiram Bermudez)."
Then, on Feb. 5, 2021, Clover published a response. Although calling many of Hindenburg's claims "completely untrue," Clover admitted (1) it "was fully aware of the DOJ inquiry" (2) Bermudez's ownership in B&H Assurance, and (3) it received a letter from the SEC following Hindenburg's report.
On this news, Clover's shares have declined sharply.
"We're focused on investor losses and whether Clover may have misled investors the legality of its business practices and related financial reporting," said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Clover shares, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding Clover should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
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Reed Kathrein, 844-916-0895
SOURCE: Hagens Berman Sobol Shapiro LLP