HAGENS BERMAN, NATIONAL TRIAL ATTORNEYS, Urges eHealth (EHTH) Investors with Significant Losses to Immediately Contact its Attorneys: Firm Investigating Possible Revenue Overstatement and Securities Fraud
SAN FRANCISCO, April 8, 2020 /PRNewswire/ -- Hagens Berman urges investors in eHealth, Inc. (NASDAQ: EHTH) who have suffered significant losses to submit their losses now. The firm is investigating possible securities law violations.
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eHealth (EHTH) Investigation:
The investigation focuses on the propriety of eHealth's accounting practices and financial disclosures.
On Apr. 8, 2020, Muddy Waters Capital published a scathing report about the company, finding that eHealth uses highly aggressive and deceptive accounting practices to mask a significantly unprofitable business. According to Muddy Waters, eHealth makes "overly optimistic" modeling assumptions concerning its health insurance plan life-time values (LTV), obscures customer churn rates, and materially understates costs. As a result, Muddy Waters claims eHealth has grossly overstated its reported revenues and operating profit, stating "[w]e adjust 2019 revenue down by $128 million or 25% [and] 2019 operating profit down by $263 million due to subjective and misapplied mark-to-market, yielding an operating loss of -$181 million."
Further, Muddy Waters charges eHealth's management with running "a massive stock promotion." While engaging in questionable accounting practices and promoting the company as "the Expedia / Zillow of health insurance," Muddy Waters points out that corporate insiders have recently dumped nearly $35 million of their personally held stock at artificially inflated prices. This includes CEO Scott Flanders, who sold 15% of his stake in January 2020 alone.
"We're focused on investors' losses and whether eHealth manipulated various financial metrics to appear more profitable," said Reed Kathrein, the Hagens Berman partner leading the investigation.
Whistleblowers: Persons with non-public information regarding eHealth should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
About Hagens Berman
Hagens Berman is a national law firm with nine offices in eight cities around the country and eighty attorneys. The firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the firm and its successes is located at hbsslaw.com. For the latest news visit our newsroom or follow us on Twitter at @classactionlaw.
Contact:
Reed Kathrein, 844-916-0895
SOURCE Hagens Berman Sobol Shapiro LLP
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