Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into eHealth, Inc. (NasdaqGS: EHTH).
On April 8, 2020, Muddy Waters Capital reported that the Company’s “highly aggressive accounting masks . . . a significantly unprofitable business,” due to member churn and an overstated “lifetime value” or “LTV” of its plans, among other things, and that the Company’s financial statements for 2019 significantly overstated revenue and operating profit. Then, on July 23, 2020, the Company announced its financial results for the second quarter of 2020, disclosing in a subsequent investor call that the Company “saw increased levels of Medicare Advantage plan churn compared to our historical observations” and projected the LTV of its Medicare Advantage policies “to decline up to 10% in the fourth quarter of 2020 and by mid-single digits for the full year” as reflected in its revised 2020 annual guidance.
Thereafter, the Company and certain of its executives were sued in a securities class action lawsuit, charging them with failing to disclose material information during the Class Period, violating federal securities laws. Recently, the court presiding over that case denied the Company’s motion to dismiss in part, allowing the case to move forward.
KSF’s investigation is focusing on whether eHealth’s officers and/or directors breached their fiduciary duties to eHealth’s shareholders or otherwise violated state or federal laws.
If you have information that would assist KSF in its investigation, or have been a long-term holder of eHealth shares and would like to discuss your legal rights, you may, without obligation or cost to you, call toll-free at 1-877-515-1850 or email KSF Managing Partner Lewis Kahn (email@example.com), or fill out the form on this page.