Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against Inovalon Holdings, Inc.

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Jun 24, 2016, 07:00 ET

NEW YORK, June 24, 2016 /PRNewswire/ -- Robbins Geller Rudman & Dowd LLP ("Robbins Geller") (http://www.rgrdlaw.com/cases/inovalon/) today announced that a class action has been commenced on behalf of purchasers of Inovalon Holdings, Inc. ("Inovalon") (NASDAQ:INOV) Class A common stock pursuant or traceable to the Registration Statement and Prospectus (collectively, the "Registration Statement") issued in connection with Inovalon's February 12, 2015 initial public offering ("IPO"). This action was filed in the United States District Court, Southern District of New York and is captioned Xiang v. Inovalon Holdings, Inc., et al., No. 1:16-cv-04923.

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Samuel H. Rudman or Andrew L. Schwartz of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at [email protected]. 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.rgrdlaw.com/cases/inovalon/. Any member of the putative 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 Inovalon, certain of its officers and directors, and the underwriters of its February 2015 IPO with violations of the Securities Act of 1933. Inovalon provides cloud-based data analytics platforms for health insurance plans, pharmaceutical companies, researchers and others in the healthcare industry.

On or about February 12, 2015, Inovalon issued over 25 million shares of common stock at $27 per share, raising more than $684 million in gross proceeds.

The complaint alleges that the Registration Statement issued in connection with the IPO contained untrue statements of material fact and omitted to state material facts both required by governing regulations and necessary to make the statements made not misleading. Specifically, defendants failed to disclose that Inovalon derives substantial revenues from sales in the City of New York and the State of New York, both of which were reforming their corporate tax schemes in order to capture more taxes from out-of-state businesses like Inovalon doing substantial business within their borders. Those corporate tax rate increases, which would take effect January 1, 2015, more than a month prior to Inovalon's IPO, significantly increased the Company's effective tax rate and thus lowered its 2015 earning potential. These material facts should have been disclose in the Registration Statement, but were not, and the omission rendered false and misleading the Registration Statement's express claim that Inovalon's year-over-year "effective income tax rate . . . remained relatively stable at 39%."

As the market learned the truth following the IPO, the price of Inovalon common stock declined significantly. At the time of the filing of the complaint, Inovalon shares were trading at less than $18 per share, or more than 33% below the IPO price.

Plaintiff seeks to recover damages on behalf of all purchasers of Inovalon Class A common stock pursuant or traceable to the Registration Statement issued in connection with the IPO (the "Class"). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.

Robbins Geller is widely recognized as one of the leading law firms advising U.S. and international institutional investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history and was ranked first in both total amount recovered for investors and number of securities class action recoveries in ISS's SCAS Top 50 Report for the last two years. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm's clients. Robbins Geller not only secures recoveries for defrauded investors, it also strives to implement corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com/cases/inovalon/ for more information.

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SOURCE Robbins Geller Rudman & Dowd LLP