Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit against Aetna Inc.

By: Legal - Law News

Coughlin Stoia Geller Rudman & Robbins LLP (“Coughlin Stoia”) (http://www.csgrr.com/cases/aetnainc/) today announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Eastern District of Pennsylvania on behalf of purchasers of Aetna Inc. (“Aetna”) (NYSE:AET) common stock during the period between July 28, 2005 and July 27, 2006 (the “Class Period”).

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from October 24, 2007. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Coughlin Stoia at 800/449-4900 or 619/231-1058, or via e-mail at djr@csgrr.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.csgrr.com/cases/aetnainc/. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges Aetna and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Aetna provides health care, dental, pharmacy, group life, disability and long-term care benefits in the United States.

The complaint alleges that during the Class Period, defendants made false and misleading statements regarding the Company’s business and prospects. Defendants told the market that Aetna’s results during the Class Period were favorable due to “continued diligence around medical costs management.” In fact, those results were misstated. The true facts, which were known by each of the defendants but concealed from the investing public during the Class Period, were as follows: (a) Aetna was losing Small Group policies, which had historically had favorable medical cost ratios (“MCRs”), and was moving to higher cost ratios with new members, which would cause increased MCRs in future quarters; (b) much of Aetna’s earnings gains in 2005 and the first quarter of 2006 were due to understated incurred but not reported (“IBNR”) accruals; (c) Aetna’s earnings were misstated in violation of Generally Accepted Accounting Principles due to defendants’ failure to properly record IBNR costs; (d) the Company’s MCR was misleading in that defendants had priced new policies so low that the MCR was certain to be much higher in future quarters; and (e) as a result of (a)-(d) above, the Company’s projections for its 2006 earnings per share were grossly overstated. As a result of the defendants’ false statements, Aetna stock traded at inflated levels during the Class Period, whereby the Company’s top officers and directors sold more than $83.4 million worth of their own shares.

Plaintiff seeks to recover damages on behalf of all purchasers of Aetna common stock during the Class Period (the “Class”). The plaintiff is represented by Coughlin Stoia, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Coughlin Stoia, a 190-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston and Philadelphia, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Coughlin Stoia lawyers have been responsible for more than $45 billion in aggregate recoveries.

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