Judge Refuses to Toss Shareholder Suit Against Clover Health

Roughly a year after a highly critical report from an activist short seller cast a pall over Clover Health Investments Corp.’s debut as a publicly traded company, a federal judge has denied a motion to dismiss a key shareholder lawsuit that accuses the Medicare Advantage startup of hiding critical information from investors.

While the Feb. 28 ruling does not make any judgment about the merits of the allegations brought by shareholders Timothy Bond and Jean-Nicolas Tremblay, it is still noteworthy, one legal expert tells AIS Health, a division of MMIT.

“Often these cases are filed but then they’re disposed of early on,” says David Kaufman, an attorney with Laurus Law Group LLC. “This case was not disposed of, so getting beyond the motion to dismiss is pretty significant, and it’s going to require substantial litigation from this point forward before it reaches any kind of decision.”

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Leslie Small

Leslie Small

Leslie has been reporting and editing in various journalism roles for nearly a decade. Most recently, she was the senior editor of FierceHealthPayer, an e-newsletter covering the health insurance industry. A graduate of Penn State University, she previously served in editing roles at newspapers in Pennsylvania, Virginia and Colorado.

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