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1
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DOCKET
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EXTRACTED KEY WORDS
MOTION MAG APPOINTMENT LEAD PLAINTIFFS LEAD COUNSEL MOVANT HOWARD CHARLES HELLER WINTERS ANDREW TRADING APPEARANCE ATTORNEY MEMORANDUM SUPPORT JOHN PRO HAC VICE HAC VICE JUDGE SQUATRITO SECURITIES EXCHANGE ACT TURNER AFFIDAVIT SELECTION MORRIS KOENIG TAWIL ANNBETH WINTERS |
Case docket was last updated on: 06/19/98.
Docket as of December 11, 1999 6:14 am Page 1
Proceedings include all events.
3:97cv2295 Heller v. Oxford Health Plans, et al CLOSED
CLOSED
U.S. District Court
District of Connecticut (New Haven)
CIVIL DOCKET FOR CASE #: 97-CV-2295
Heller v. Oxford Health Plans, et al Filed:
10/28/97
Assigned to: Judge Dominic J. Squatrito Jury demand: Plaintiff
Demand: $0,000 Nature of Suit: 850
Lead Docket: None Jurisdiction: Federal
Question
Dkt# in other court: None
Cause: 15:78m(a) Securities Exchange Act
CHARLES HELLER, obo himself & J. Daniel Sagarin
all others similarly situated 877-6071
plaintiff [COR LD NTC]
Elias A. Alexiades
[COR LD NTC]
Hurwitz & Sagarin
147 North Broad St., Po Box 112
Milford, CT 06460-0112
203-877-8000
FTS 878-9800
v.
OXFORD HEALTH PLANS, INC John F.X. Peloso, Jr.
defendant [COR LD NTC]
Robinson & Cole
Financial Centre, 695 E. Main
St., Pobx 10305
Stamford, CT 06904-2305
SNIPPETS:
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2
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MEMORANDUM AND ORDER 2
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EXTRACTED KEY WORDS
PLAINTIFFS KPMG ACCOUNTING AUDIT ALLEGE FINANCIAL STATEMENTS DEFENDANT FACTS VIOLATIONS SUPP RECKLESSNESS STANDARDS AUDITING ALLEGATIONS GAAS NYSID COURT FRAUD COMPUTER SYSTEM EVIDENCE FRAUDULENT RED FLAGS INFERENCE YORK COMPLAINT CLASS PERIOD HEALTH CARE SERVICES CONDUCTING REPORTING |
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
____________________________________
) MDL-1222 (CLB)
)
IN RE OXFORD HEALTH PLANS, INC., ) MEMORANDUM & ORDER
SECURITIES LITIGATION ) [denying KPMG's motion to dismiss]
) [filed May 25, 1999]
____________________________________ )
Presently before the Court in these cases alleging securities fraud, which have been
consolidated for pre-trial purposes,1 is the motion pursuant to Rule 12(b)(6) and Rule
9(b), Fed. R. Civ. P., of defendant KPMG LLP ("KPMG"). KPMG seeks dismissal of the
complaint against it on the ground that plaintiffs fail to meet the pleading standards of the
Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4 (the "PSLRA").
Plaintiffs filed opposition papers on February 19, 1999 and KPMG filed reply papers on
April 2, 1999. A hearing was held on April 28, 1999 and decision reserved.
FACTUAL BACKGROUND
Plaintiffs are persons and entities who allegedly purchased publicly-traded securities of
Oxford Health Plans, Inc. ("Oxford") during the period from November 6, 1996 through
December 9, 1997 (the "Class Period"). Plaintiffs purport to bring this complaint on
behalf of themselves and all others who purchased Oxford securities during the Class
Period, as well as on behalf of a sub-class of all persons and entities who purchased
Oxford common stock contemporaneously with sales by certain individual defendants
during the Class Period.
Defendant Oxford is a managed care company that provides its members in New York,
New Jersey, Pennsylvania and Connecticut, with comprehensive health care services on a
prepaid basis through a network of medical service providers. The individual defendants
were at all times during the Class Period officers and directors of Oxford. Defendant
KPMG is a firm of certified public accountants that was Oxford's independent auditor
from 1985 to 1998. KPMG conducted an audit of Oxford's financial statements for the
fiscal year ended December 31, 1996, and issued a report dated February 18, 1997,
opining that Oxford's 1996 financial statements were prepared in accordance with
generally accepted accounting principles ("GAAP") and that KPMG's audit was
conducted in accordance with generally accepted auditing standards ("GAAS").
Plaintiffs' allegations must be taken as true for purposes of this motion to dismiss. The
following facts are thus taken as true: Oxford's press releases and SEC filings during the
Class Period contained false or misleading information or omitted material information
about the accuracy of Oxford's earnings and enrollment figures and its progress in
remedying delays in billing and claims processing associated with a conversion of its
computer system. Also during that time, Oxford's financial statements were in violation
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4
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CONSOLIDATED AMENDED COMPLAINT
|
EXTRACTED KEY WORDS
AMOUNTS PAY BILLS PAYMENTS PULSE COMPUTERS EXAMINATIONS MEMBERSHIP ACCOUNTANT CLASS ACTION COMPLAINT AMENDED CLASS ACTION |
IN THE UNITED STATES DISTRICT
FOR THE SOUTHERN DISTRICT
WHITE PLAINS DIVISION
P---J?
IN RE OXFORD HEALTH PLANS, : MDL Dkt.
INC., SECURITIES LITIGATION : :
CONSOLIDATED AND AMENDED CLASS ACTION COMPLAINT
Plaintiffs, by and through their
the
following upon information and belief,
allegations concerning Plaintiffs, which
personal knowledge. Plaintiffs' information
upon, among other things, their investigation,
limitation: (a) review and analysis of
Health Plans, Inc. ("Oxfordl' or the 'VCompanylV)
Securities and Exchange Commission ("SEC");
analysis of Reports on Oxford Health
Oxford Health Plans (NY), Inc. (llOHPNYtl)
State Insurance Department ("NYSID"); (c)
providers within the Oxford network,/and
members of Oxford; (d) review and analysis
analysts' reports concerning Oxford; (e)
of
reports of conference calls between Oxford
review and analysis of press releases and
disseminated by certain of the Defendants;
analysis of documents filed by Oxford with
.
commissioners and complaints filed by
publicly available information about Oxford.
that further substantial evidentiary
allegations after a reasonable opportunity
Most
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5
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MEMORANDUM AND ORDER 1
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EXTRACTED KEY WORDS
APPEALS LAW PLAINTIFFS LITIGATION CONTROLLING DISTRICT COURT CERTIFICATION STATUTE TERMINATION DISCRETION LEAD PLAINTIFF MOTION DETERMINATION APPOINTMENT COLPERA OPINION APPELLATE REVIEW CO-LEAD PLAINTIFFS PERMIT CIRCUIT PSLRA INTERLOCUTORY CIR MATTER LEXIS ULTIMATE TERMINATION SUBSTANTIAL GROUND SUPP PENDING |
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
) MDL NO. 1222(CLB)
IN RE OXFORD HEALTH PLANS, INC. )
) MEMORANDUM & ORDER
____________________________________ ) [filed Aug. 5, 1998]
On July 15, 1998 this Court issued a Memorandum Decision in this securities class action
appointing three co-lead plaintiffs under the Private Securities Litigation Reform Act of
1995 ("PSLRA"), 15 U.S.C. § 78u-4. See In re Oxford Health Plans, Inc., Securities
Litigation, 1998 U.S. Dist. LEXIS 10694, 1998 WL 400741 (S.D.N.Y. July 15, 1998).
Familiarity with the prior opinion is presumed.
Presently before the Court for decision is the motion of the Public Employee's Retirement
Association of Colorado ("ColPERA"), one of the selected co-lead plaintiffs, requesting
this Court to amend its July 15, 1998 Memorandum Decision, pursuant to Rule 59(e) Fed.
R. Civ. P., to include certification under 28 U.S.C. § 1292(b) in order to permit an
immediate appeal to the United States Court of Appeals for the Second Circuit. ColPERA
lists five questions that it wishes to certify, all of which relate to the discretion of the
District Court under the PSLRA to appoint more than one plaintiff and to structure the
leadership, within the mandate of the statute, in the manner it perceives to be in the best
interest of the proposed class.1 ColPERA's motion is denied, primarily because such an
appeal would not advance the ultimate termination of the litigation, but also because this
is not an appropriate question for appellate review and because the Court does not
perceive that there is substantial ground for difference of opinion as to the lawfulness of
the Order to be entered on the Court's July 15, 1998 Decision.
Section 1292(b) of Title 28 allows for appeal from an otherwise unappealable
interlocutory order upon consent of both the District Court and the Court of Appeals.
Section 1292(b) provides in relevant part that:
When a district judge, in making in a civil action an order not otherwise
appealable under this section, shall be of the opinion that such order
involves a controlling question of law as to which there is substantial
ground for difference of opinion and that an immediate appeal from the
order may materially advance the ultimate termination of the litigation, he
shall so state in writing in such order. The Court of Appeals which would
have jurisdiction of an appeal of such action may thereupon, in its
discretion, permit an appeal to be taken from such order, if application is
made to it within ten days after the entry of the order.
28 U.S.C. § 1292(b). Thus, the District Court may certify an interlocutory order for
appeal if it makes three separate interdependent findings of fact.
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6
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MEMORANDUM DECISION
|
EXTRACTED KEY WORDS
COURT COUNSEL LITIGATION SECURITIES PSLRA MOTION ACT EXCHANGE REPRESENTING MEMBERS PBHG DISTRICT YORK CONSOLIDATING PURPOSE PROVISIONS PRIVATE SECURITIES LITIGATION VOGEL GROUP APPOINTMENT LITIGATION REFORM ACT CO-LEAD PLAINTIFFS EXECUTIVE COMMITTEE INSTITUTIONAL INVESTORS COMMISSION EISENHOFER SECURITIES FRAUD AMICUS CURIAE MEMORANDUM ADEQUATE PLAINTIFF SETTLEMENT |
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------x
MDL-1222
IN RE OXFORD HEALTH PLANS, INC., MEMORANDUM DECISION
SECURITIES LITIGATION
-------------------------------------------------------x
Brieant, J.
Presently before the Court in these cases alleging securities fraud, which have been
consolidated for pre-trial purposes, are a number of motions relating to the designation of
lead plaintiff and approval of lead counsel under the provisions of section 21D(a)(3)(B)
of the Securities and Exchange Act of 1934 ("Exchange Act"), as amended by the Private
Securities Litigation Reform Act of 1995 (the "PSLRA" or "the Act"), 15 U.S.C. § 78u-4.
A hearing was held on June 11, 1998 and decision reserved.
On April 28, 1998 the Judicial Panel on Multidistrict Litigation filed an order
consolidating the 52 separate actions in this litigation (38 from the District of
Connecticut, 9 from the Southern District of New York, 4 from the Eastern District of
New York and 1 from the Eastern District of Arkansas) and transferring them to this
Court for pretrial purposes pursuant to 28 U.S.C. § 1407. Two additional cases have since
been filed in this District.1 For the reasons discussed below, this Court now grants the
motions of the Public Employee's Retirement Association of Colorado, the Vogel Group
(as defined below) and PBHG to be appointed co-lead plaintiffs for the securities fraud
cases. The Court also approves the plaintiffs' respective choices -- Grant & Eisenhofer,
P.A., Milberg Weiss Bershad Hynes & Lerach, L.L.P., and Chitwood & Harley -- to act
as co-lead counsel. Such counsel shall assemble and consult with an Executive
Committee as set forth below.
I. The Private Securities Litigation Reform Act of 1995
The PSLRA, which altered the procedures for bringing class actions under the federal
securities laws, was enacted in response to a variety of perceived abuses of the class
action procedure. H.R. Rep. No. 104-369, at 31 (1995) reprinted in 1996 U.S.C.C.A.N.
730. Among other things Congress was concerned that the lead plaintiff in class action
lawsuits was being determined by plaintiffs' lawyers' race to the courthouse. See S. Rep.
No. 104-98 (1995) reprinted in 1996 U.S.C.C.A.N. 679. In enacting the PSLRA,
Congress intended to "increase the likelihood that parties with significant holdings in
issuers, whose interests are more strongly aligned with the class of shareholders, will
participate in the litigation and exercise control over the selection and actions of plaintiffs
counsel." H.R. Rep. No. 104-369, at 32 (1995) reprinted in 1996 U.S.C.C.A.N. at 731.
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7
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COMPLAINT
|
EXTRACTED KEY WORDS
OXFORD COMMON STOCK PLAINTIFF WIGGINS EXCHANGE CLASS ACTION SECURITIES SULLIVAN PLANS CASSIDY DELAYS MEMBERS EARNINGS MARKET PRICE PUBLIC FILINGS ALLEGATIONS MATERIAL FACTS OXFORD HEALTH PLANS MISLEADING EXCHANGE ACT COMPUTER SYSTEM CLAIMS PAYMENTS FINANCIAL CONDITION MEMBERSHIP CONNECTICUT CHARLES HELLER OPERATING EARNINGS REPRESENTATIONS EXECUTIVES |
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
----------------------------------------------------- x
CHARLES HELLER, on behalf of himself :
and all others similarly situated, : Civil Action No.
: 3:97CV02295 DJS
Plaintiff, : [filed Oct. 28, 1997]
:
-against- :
: CLASS ACTION COMPLAINT
OXFORD HEALTH PLANS, INC.; :
STEPHEN F. WIGGINS; WILLIAM M. :
SULLIVAN; and ANDREW B. CASSIDY, : JURY TRIAL DEMANDED
Defendants. :
----------------------------------------------------- x
Plaintiff Charles Heller, individually and on behalf of all others similarly situated, by his
attorneys, alleges the following upon information and belief based upon the investigation
of his counsel, which included, among other things, a review of various public filings by
the corporate defendant with the Securities and Exchange Commission ("SEC") and
various articles detailed herein (except for those allegations which pertain to plaintiffs,
which allegations are based upon personal knowledge):
NATURE OF THE ACTION
1. Plaintiff brings this action as a class action on behalf of himself and all other persons
or entities who purchased the common stock of Oxford Health Plans, Inc. ("Oxford" or
the "Company") during the period between November 6, 1996 and October 24, 1997,
inclusive (the "Class Period"), to recover damages caused to the class by defendants'
violations of the federal securities laws.
2. Defendants Oxford, Stephen F. Wiggins, William M. Sullivan and Andrew B. Cassidy
violated the securities laws by engaging in a conspiracy and course of conduct pursuant
to which they made a series of materially false and misleading statements concerning the
business and financial operations of Oxford with the intent and having the effect of
substantially inflating the trading price of Oxford common stock throughout the Class
Period.
3. Prior to the Class Period, defendants announced that the Company was converting to a
new computer system in order to keep pace with expanding membership. Throughout the
Class Period, defendants knew yet failed to disclose and materially misrepresented that
this computer upgrade, inter alia, caused tremendous delays in generating premium bills.
These delays, in turn, severely restricted the Company's ability to collect past premiums,
negatively affecting revenues and earnings and requiring the Company at the end of the
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