Voila!

Plaintiffs frequently bring securities class actions arguing that the corporate disclosure of a regulatory issue has rendered earlier statements about regulatory compliance false or misleading.  But are general corporate statements concerning regulatory compliance material to investors? In Singh v. Cigna Corp., 2019 WL 1029597 (2d Cir., March 5, 2019), the Second Circuit addressed this issue.  Following an audit by the Centers for Medicare and Medicaid Services (“CMS”), Cigna received a letter stating that it had “substantially failed to comply with CMS requirements regarding coverage determinations, appeals, benefits administration, compliance program effectiveness and similar matters.”  After Cigna disclosed the letter and CMS’s proposed sanctions, its stock price declined. The plaintiffs argued that these compliance issues rendered a number of prior Cigna statements false or misleading.  In particular, Cigna had disclosed…

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