Inovalon Holdings Inc (NASDAQ: INOV) Investor Securities Class Action Lawsuit 06/24/2016

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Company Name(s): 
Inovalon Holdings
Case Name: 
Inovalon Holdings Shareholder Class Action Lawsuit 06/24/2016
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
Class Period Begin: 
Class Period End: 
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
Date Settled: 
Settlement Amount: 
Deadline to Participate in Settlement: 
Settlement Notice: 
Settlement Proof: 

March 11, 2019 - The court preliminarily approved the settlement.

March 6, 2019 - Parties filed a stipulation of settlement.

May 23, 2017 - The court granted in part and denied in part defendants' motion to dismiss.

December 22, 2016 - The lead plaintiff filed an amended consolidated complaint.

September 20, 2016 - Lead plaintiff and lead counsel were appointed and all cases were consolidated.

August 23, 2016 - Lead plaintiff motions were filed.

June 24, 2016 - An investor in shares of Inovalon Holdings Inc (NASDAQ: INOV) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by Inovalon Holdings Inc in connection with certain allegedly false and misleading statements made in connection with Inovalon Holdings Inc's February 12, 2015 initial public offering ("IPO").

According to the complaint the plaintiff alleges that the defendants violated Federal Securities Laws. The lawsuit was filed on behalf of purchasers of Inovalon Holdings Inc (NASDAQ: INOV) Class A common stock pursuant or traceable to the Registration Statement and Prospectus.

Bowie, MD based Inovalon Holdings Inc is a technology company that combines advanced cloud-based data analytics and data-driven intervention platforms to provide services for health plans, hospitals, physicians, patients, pharmaceutical companies and researchers. Inovalon Holdings Inc went public in early February 2015 and shares reached as high as $31.75 per share in late February 2015.

The plaintiff claims that the Registration Statement issued in connection with the IPO contained allegedly untrue statements of material fact and omitted to state material facts both required by governing regulations and necessary to make the statements made not misleading. More specifically, the plaintiff alleges that the defendants failed to disclose that Inovalon Holdings Inc derives substantial revenues from sales in the City of New York and the State of New York, both of which were reforming their corporate tax schemes in order to capture more taxes from out-of-state businesses like Inovalon Holdings Inc doing substantial business within their borders. The plaintiff says that those corporate tax rate increases, which would take effect January 1, 2015, more than a month prior to Inovalon Holdings Inc's IPO, significantly increased the Company's effective tax rate and thus lowered its 2015 earning potential and that these material facts should have been disclose in the Registration Statement, but were not, and the omission rendered false and misleading the Registration Statement's express claim that Inovalon Holdings Inc's year-over-year "effective income tax rate . . . remained relatively stable at 39%."

In late March 2015 Inovalon Holdings Inc reported its fourth quarter and full year 2014 results. Inovalon Holdings Inc reported that its annual Total Revenue rose from $295.80 million in 2013 to $361.54 million in 2014 and that its Net Income increased from $32.72 million in 2013 to $65.35 million in 2014.

Since then shares of Inovalon Holdings Inc (NASDAQ: INOV) declined to as low as $15.12 per share on January 21, 2016.