Benefytt Executives Under Investigation for Possible Breaches of Fiduciary Duties
Schubert Jonckheer & Kolbe LLP is investigating potential shareholder derivative claims on behalf of stockholders of Benefytt Technologies, Inc. (NASDAQ: BFYT) (“Benefytt”), formerly known as Health Insurance Innovations, Inc. (NASDAQ: HIIQ), related to the company’s statements concerning regulatory compliance matters and its relationship with certain third parties. Benefytt sells and distributes a variety of health and life insurance products.
Benefytt’s allegedly false and misleading public statements have exposed the company to multiple securities fraud lawsuits. In one case, it is alleged that Benefytt deceived investors between November 2016 and September 2017 about widespread regulatory compliance failures and accusations of fraud made against Benefytt by state enforcement agencies, including in Montana. According to the complaint, during this period, Benefytt misled investors about the reasons and nature of its unsuccessful application for a critically important third-party administrator license with Florida’s Office of Insurance Regulation. Judge Elizabeth A. Kovachevich of the U.S. District Court for the Middle District of Florida upheld portions of the class action complaint in June 2019, finding that the plaintiff met the heightened pleading standards on a motion to dismiss.
In a separate case, between September 2017 and April 2019, Benefytt allegedly falsely assured stockholders that the company and its third-party call centers had an exemplary compliance and customer service record. According to the complaint, during this period, Benefytt’s public statements were false and misleading because the company was complicit with a related third party in a “classic bait-and-switch scam” to sell health insurance policies that were not compliant with the Affordable Care Act and because large numbers of customers complained about Benefytt’s insurance policies. Judge William F. Jung of the U.S. District Court for the Middle District of Florida upheld the class action complaint in this second case in November 2019, finding that the plaintiff met the heightened pleading standards.
We are investigating potential derivative claims based on harm the company has suffered as a result of potential breaches of fiduciary duty by the company’s officers and directors.
If you currently own Benefytt stock and wish to obtain additional information—or would like to participate in a potential shareholder derivative action—please complete the form below for a free legal consultation.
