WASHINGTON, Oct. 29 2002 (PRIMEZONE) -- The Law Office of Mark McNair announces a securities class action lawsuit has been filed against CIGNA Corp. (NYSE:CI). The complaint is on behalf of, and seeks damages for, shareholders who purchased CIGNA securities between May 2, 2001 and October 24, 2002, inclusive (Class Period).
The case is pending in the United States District Court for the Eastern District of Pennsylvania against CIGNA, H. Edward Hanway (its CEO and Chairman of the Board), James G. Stewart (its CFO and Executive Vice President) and James A. Sears (its Chief Accounting Officer). The case charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities.
The Law Office of Mark McNair is currently investigating these claims. If you were a purchaser of CIGNA during the period indicated and want to discuss your legal rights or if you have information relevant to the lawsuit, please contact Mark McNair at 1101 30th Street N.W., Suite 500, Washington, D.C, 20007, by telephone at (877) 511.4717 or (202) 872.4717, or via e-mail at mcnair@justice4investors.com.
Throughout the Class Period, Plaintiffs allege, the defendants issued press releases announcing impressive earnings growth, while failing to disclose that the Company had not adequately reserved for its reinsurance obligations for its guaranteed minimum death benefits (GMDB). After the market closed on September 3, 2002, the Company issued a press release announcing a $720 million after-tax charge as part of a program to manage its reinsurance exposure for its GMDB obligations. Nevertheless, CIGNA still assured the market that it would meet its third quarter and 2002 financial targets.
On October 18, 2002, CIGNA announced that it was taking an additional $315 million charge relating to the Unicover arbitration. Thus, the Complaint alleges, CIGNA's write-downs relating to its discontinued reinsurance business, which the company had downplayed throughout the Class Period as immaterial, exceeded one billion dollars for the third quarter. Then, on October 24, 2002, the Company announced that it would not meet its third quarter and year 2002 guidance, despite its recent reassurances to the contrary. This revelation further stunned the market and resulted in CIGNA stock's price tumbling 42%, falling from $63.60 per share at the close of October 24 to as low as $36.81 on October 25, on extremely heavy trading volume.
If you are a member of the Class, you may move the court no later than December 24, 2002 to serve as lead plaintiff for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca