HARTFORD, Conn., Oct. 4, 2005 (PRIMEZONE) -- The law firm of Schatz & Nobel, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Eastern District of Virginia on behalf of all persons who purchased the common stock of AMERIGROUP (NYSE:AGP) ("the Company") between April 27, 2005 and September 28, 2005 (the "Class Period").
The Complaint alleges AMERIGROUP violated federal securities laws by issuing materially false statements regarding the Company's business and financial condition. Specifically, AMERIGROUP failed to account for at least $23 million in medical costs incurred in prior quarters but not included in the results for those quarters. This caused the Company's stock to trade as high as $49.30 per share during the Class Period. Defendants took advantage of this artificial inflation, selling 170,712 shares of their AMERIGROUP stock for proceeds of $6.1 million.
On September 28, 2005, after the market closed, the Company issued a press release announcing that "It expects to report a third quarter 2005 loss of $0.06 to $0.08 per diluted share, as compared to current consensus earnings estimate of $0.48 per diluted share. As a result, the Company will not meet its 2005 annual earnings guidance of $1.73 to $1.78 per diluted share. The third quarter results will include additional estimated medical costs related to services performed in prior periods, primarily the first and second quarters of 2005, of approximately $23 million, or $0.26 per diluted share . . . Third quarter earnings per diluted share, excluding the impact of the prior period development, are estimated to be $0.18 to $0.20 as compared to current consensus earnings estimate of $0.48 per diluted share." On this news, AMERIGROUP fell $14.70 per share before closing at $19.81 per share.
If you are a member of the class, you may, no later than December 2, 2005, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
While Schatz & Nobel has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, class action cases in general, and your rights, please contact Schatz & Nobel toll-free at (800) 797-5499, or by e-mail at sn06106@aol.com, or visit our website: www.snlaw.net.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.