Clover Health has reached settlement agreements in seven derivative lawsuits, resolving all remaining civil litigation that accused the company of misleading investors and committing securities fraud preceding its initial public offering in 2021.
The proposed settlements contain no admission of liability or wrongdoing and are subject to definitive documentation and final court approval, according to a June 22 Clover Health news release.
The settlement does not involve any monetary payment, other than payment of an award of fees and expenses to plaintiffs' lawyers, according to the release. That payment amount has yet to be determined. The defendants in the derivative lawsuits will receive customary releases and Clover Health will implement "a suite of corporate governance enhancements," according to the release.
Defendants entered into the settlements to avoid the "burden, expense, and distraction of ongoing litigation."
"The board and the company are happy to have reached this settlement of the outstanding derivative lawsuits," Clover Health CEO Andrew Toy said in the release. "This resolution, along with the previously announced settlement of the securities class action, allows the Clover team to remain mission-driven and mission-focused — to improve the lives of our members and build and maintain our strong business."
In April, Clover settled a class-action lawsuit for $22 million that partly accused the company of concealing an active investigation by the Department of Justice into the company's software offering, Clover Assistant. The complaint alleged that Clover Assistant would identify opportunities to increase a patient's Medicare risk score and "nudge" physicians to update a patient's chronic conditions.