News Briefs: Humana Faces Shareholder Suit Tied to Utilization Woes

Humana Inc. shareholders, led by an ironworkers’ annuity fund, have filed a proposed class-action lawsuit against the companies’ top executives. The suit, filed on June 3 in the U.S. District Court the District of Delaware, accuses Humana CEO Bruce Broussard and Chief Financial Officer Susan Diamond of violating the Securities Exchange Act of 1934 by making false and misleading statements that downplayed pressures on Humana’s earnings from heightened health care utilization among Medicare Advantage members. When it became clear that the uptick in utilization was a durable trend that significantly affected its financial results, the company’s stock values fell, causing shareholders to lose money, the suit claims. The litigation comes after UnitedHealth Group investors filed suit against that company alleging it made false and misleading statements to shareholders in the months between when it learned about a Dept. of Justice investigation and when that probe became public.

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