On Thursday a case was filed in the Eastern District of New York by Victorino Martinez as a class action against Bright Health Group and its officers. The case alleges securities violations and omissions made in the process of the initial public offering (IPO) issued by the defendant.
Bright Health, according to the complaint, is an integrated care delivery company that provides commercial and medicare affiliated health insurance as well as operating and managing affiliated primary care clinics.
As a part of the IPO, Bright Health filed several documents, including a Form S-1 notification and a Form 424B4 Prospectus. These documents served as a foundation for an offering of 51 million shares with an offering price of $18.00 per share resulting in proceeds of $887 million.
The plaintiff accuses the defendants of filing false or misleading documents, specifically stating that: “(i) Bright Health had overstated its post-IPO business and financial prospects; (ii) the Company was ill-equipped to handle the impact of COVID-19-related costs; (iii) the Company was experiencing a decline in premium revenue because of a failure to capture risk adjustment on newly added lives.” Per the plaintiff, the later announcement of costs and missed earnings caused the shares to drop in value below the IPO rate.
The plaintiff is suing for violations of Section 10(b) of the Exchange act, violations of section 20(a), violations of section 11, and violations of section 15. The plaintiff is represented by Pomerantz LLP and Bronstein, Gewirtz & Grossman, LLC.