NEW YORK, Oct. 30, 2002 (PRIMEZONE) -- Abbey Gardy, LLP commenced a Class Action lawsuit in the United States District Court for the District of Pennsylvania on behalf of a class (the "Class") of all persons who purchased securities of CIGNA Corporation ("Cigna" or the "Company") (NYSE:CI) between May 2, 2001 and October 24, 2002, inclusive (the "Class Period"). The Compliant names as defendants Cigna, H. Edward Hanway, James G. Stewart and James A. Sears.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder by issuing a series of material misrepresentations to the market during Class Period thereby artificially inflating the price of Cigna securities. The Complaint alleges that throughout the Class Period defendants issued press releases announcing CIGNA's quarterly and annual results of operations and filed reports with the SEC, which reported its financial performance and seemingly impressive earnings growth and represented that operating income in 2002 was expected to be $1.1 billion.
The Complaint alleges that defendant's representations during the Class Period were materially false and misleading when made because they failed to disclose that CIGNA had failed to adequately reserve for its obligations under the Guaranteed Minimum Death Benefits ("GMDB") reinsurance that it had provided, thereby artificially inflating its earnings and net worth and its projected income figure was lacking in any reasonable basis when made.
On September 3, 2002, after the market closed CIGNA issued a press release announcing that it has instituted a program "to manage run-off reinsurance exposure" for its GMDB obligations, requiring it to take a $720 million after-tax ($1.1 billion pre-tax) charge. In reaction to the announcement, the price of CIGNA common stock dropped by 10% during the day, closing at $82.65.
On October 24, 2002, the Company revealed that it would not meet its third quarter and year 2002 guidance -- even excluding the recent $720 million and $315 million 2002 guidance -- even excluding the recent $63.60 per share close on stock plummeted by 42%, falling from a $63.60 per share close on October 24, 2002 to trade as low as $36.81 per share on October 25, on extreme heavy trading.
Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired Cigna securities during the Class Period. If you purchased or otherwise acquired Cigna securities during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. If you purchased Cigna securities during the Class Period, you may, no later than December 24, 2002, request that the Court appoint you as lead plaintiff.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiffs." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.
Abbey Gardy, LLP has been retained as one of the law firms to represent the Class. The attorneys at Abbey Gardy, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact Nancy Kaboolian, Esq. of Abbey Gardy, LLP at (800) 889-3701 or email Nkaboolian@abbeygardy.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca