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news.WellCare Health Plans has resolved the investigation led by US Securities and Exchange Commission (SEC) regarding the company’s financial filings. The company will pay a penalty of $10 million and has agreed upon the final judgment that states permanent injunction against any future violations of certain provisions of the federal securities laws.
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WellCare will pay a total civil penalty of $10 million, and $1 for disgorgement, in addition to post-judgment interest. The initial payment of $2.5 million will be paid within 30 days – as quoted in businesswire.com.
SEC alleged that WellCare materially overstated publicly reported net income, stemming from a scheme to withhold money from Florida healthcare programs. The company neither denied nor admitted the SEC allegations, Reuters reports.
On May 5, 2009, the company settled the same case with the Florida Attorney General’s Office and the US Attorney’s Office for the Middle District of Florida by signing a Deferred Prosecution Agreement.
For the period ended March 31, 2009, WellCare registered an accrual of $50 million related to investigation settlement discussions with the SEC and other federal agencies. Therefore, the company will not post any incremental expense.