On Monday a case was filed in the Southern District of New York by investor Richard Lawrence against Castlight Health Inc. and its board of directors. The case is regarding allegations of violations of the Securities Exchange Act of 1934. It is the fourth such case against Castlight in recent weeks, all in connection with a recently announced merger.
“Castlight is a provider of a digital healthcare navigation platform with a team of clinical and benefits experts to help members connect and engage with the right health programs and care,” the complaint explained.
In January, the company announced a merger proposal with Vera Whole Health. As a part of this merger, documents were distributed to the shareholders as required by the Securities Exchange Act.
However, the plaintiff alleges that the form 14D-9 was materially incomplete and contained misleading representations in violation of Sections 14(e) and 20(a). Specifically, the plaintiff alleges that the documents do not include sufficient information regarding the financial projections completed by the board and management, does not include information regarding agreements entered into with Anthem, Inc., and does not provide sufficient information regarding conflicts of interest regarding company insiders and the company’s financial advisor William Blair & Co.
The plaintiff seeks injunctive relief to enjoin the consummation of the merger until the omissions are remedied, or if the merger is consummated prior to providing the information, seeks to be made whole against any damages. Plaintiff is represented by Rowley Law PLLC.
