HARTFORD, Conn., Nov. 23, 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 Southern District of New York on behalf of all persons who acquired the publicly traded securities of Universal American Financial Corp (Nasdaq:UHCO) ("Universal American" or the "Company") between February 16, 2005 and October 28, 2005, inclusive (the "Class Period"). Also included are all those who purchased in the secondary offering on or around June 16, 2005.
The Complaint alleges defendants violated federal securities laws by issuing a series of materially false statements concerning the Company's medical loss ratio. The medical loss ratio is an expression of the relation of the cost of health care provided to premium income. An increase in the medical loss ratio means higher expenses relative to premium income, which in turn indicates that the Company is growing less profitable. The Company stated that the profitability of its Medicare Advantage business depended, to a significant degree, on the Company's ability to predict and effectively manage costs related to the provision of healthcare services. State regulations required that the Company monitor its medical loss ratio and the Company claimed to have systems in place that enabled it to do so. Defendants further stated that they were reversing a negative trend in the medical loss ratio.
On October 28, 2005, defendants announced a 22% year-over-year decline in net income resulting from higher medical care costs and expenses. On this news, the Company's share price dropped $7.50 to close at below $15.00 per share. During the Class Period, the Company and Company insiders sold Universal American shares for proceeds in excess of $200 million.
If you are a member of the class, you may, no later than January 23, 2006, 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.