NEW YORK, July 28, 2005 (PRIMEZONE) -- Goodkind Labaton Rudoff & Sucharow LLP filed a class action lawsuit on July 27, 2005 in the United States District Court for the Central District of California, on behalf of persons who purchased or otherwise acquired publicly traded securities of Molina Healthcare, Inc. ("Molina Healthcare" or the "Company") (NYSE:MOH) between November 3, 2004 and July 20, 2005, inclusive, (the "Class Period"). The lawsuit was filed against Molina Healthcare, J. Mario Molina, and John C. Molina ("Defendants").
If you are a member of this class you can view a copy of the complaint and join this class action online at http://www.glrslaw.com/get/?case=Molina
If you bought Molina Healthcare securities between November 3, 2004 and July 20, 2005, inclusive, you may qualify to serve as Lead Plaintiff. Lead Plaintiff papers must be filed with the court no later than September 26, 2005. If you would like to consider serving as lead plaintiff or have any questions about the lawsuit, please contact one of our representatives or Christopher Keller, Esq. at 800-321-0476.
The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that Defendants issued a series of false and misleading statements regarding Molina Healthcare's operating condition, and failed to disclose:
-- The Company was experiencing rising costs;
-- State-approved payments associated with the Company's Medicaid
contracts were insufficient to cover rising medical-care
costs; and,
-- As a result, the Company's financials would be materially and
adversely impacted.
On July 20, 2005, Molina Healthcare announced that for the second quarter 2005, it would report a loss per diluted share of $(0.15) to $(0.20). The Company also announced it was revising its earnings guidance for fiscal year 2005 to $0.73 to $0.80 per share from its previously issued guidance of $2.40 to $2.45 per share, and net income of $20.6 million to $22.6 million, from its previously announced guidance of $67.0 million to $69.0 million. The sudden and dramatic reduction in guidance comes after the Company had reiterated its guidance three times in 2005 and after it postponed on May 18, 2005, an equity offering primarily on behalf of the Molina Family Trusts. News of this shocked the market, sending the shares $20 per share lower, to trade at $26.00, or a one-day decline of 43 percent in reaction to the news.
Plaintiffs are represented by the law firm of Goodkind Labaton Rudoff & Sucharow LLP. Goodkind Labaton is one of the country's premier national law firms that represent individual and institutional investors in class action, complex securities and corporate governance litigation. The firm has been a champion of investor rights for over 40 years and has been recognized for its reputation for excellence by the courts.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.