WellCare Settlement Tally Tops $427 Million
The insurer reported losses of $128.9 million, or $3.05 a share, for the second quarter of 2010, which it attributed to the settlement costs.
On May 19, 2009, WellCare paid a $10 million civil fine to the Securities and Exchange Commission to settle an investigation related to earnings statements irregularities. On May 5, 2009 the insurer paid $80 million to Florida and federal prosecutors to resolve fraud allegations stemming from its contracts with Florida Medicaid and Florida Health Kids Corp.
"We believe we will be able to meet our known near-term monetary obligations, including the terms of this settlement agreement, and maintain sufficient liquidity to operate our business," said WellCare CFO Tom Tran.
WellCare has been the subject of widespread speculation and litigation for the past four years, after federal investigators raided the insurer's Tampa headquarters, carted off boxes of documents, and grilled executives.
In 2007, WellCare stockholders filed federal and state lawsuits against former Chairman/President/CEO Todd Farha, former CFO Paul Behrens, former General Counsel Thad Bereday, and other current and former WellCare directors. On July 7, a federal court gave permission for WellCare to sue the former executives.
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