In re WageWorks, Inc. Securities Litigation Frequently Asked Questions
Frequently Asked Questions about the WageWorks, Inc. Securities Litigation
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Please email the details of your request to [email protected]. Include your name, claim number, reason for the request, and all appropriate legal documentation to establish your authority to change the name of a payee on a check. Please also confirm the address where the replacement check should be sent. If you have specific questions about the type of documentation required, answers will be provided in response to your inquiry.
If you are unable to email us your request, you may mail it (along with supporting documentation) to:
WageWorks Securities Settlement
c/o Kroll Settlement Administration
P.O. Box 225391
New York, NY 10150-5391
This is a class action arising from allegations of false and misleading financial statements and secondary stock offering documents. Lead Plaintiffs, the Public Employees' Retirement System of Mississippi ("MPERS") and the Government Employees' Retirement System of the Virgin Islands ("GERS") (collectively the "1934 Act Plaintiffs"), allege that, between May 6, 2016 and March 1, 2018 (the “Class Period”), WageWorks, Jackson, and Callan made, or caused to be made, false and misleading statements regarding WageWorks’ financial results, which were subsequently restated in WageWorks' March 18, 2019 restatement (“2019 Restatement”).
In addition, Lead Plaintiff, the Public Employees Retirement Association of New Mexico ("PERA") alleges violations of the Securities Act of 1933 by WageWorks, Jackson, Callan, and certain directors of the Company based on the incorporation of false and misleading statements into the Company’s June 19, 2017 Offering’s Registration Statement and Prospectus, which included Jackson’s and Callan’s certifications of WageWorks’ 2016 and 2017 financial results, and statements regarding the effectiveness of the Company’s internal controls.
On March 1, 2018, the Company announced a delay in filing its annual report for the year ended December 31, 2017. On March 2, 2018, the Company acknowledged weaknesses in its internal controls over financial reporting related to certain areas. On April 5, 2018, the Company acknowledged that it would restate its financial statements for the second and third quarters and full fiscal year 2016 and for the first, second and third quarters 2017 and that, as a result, it would be unable to timely file a Form 10-K for fiscal year 2017. Thereafter, on March 18, 2019, in the 2019 Restatement, the Company restated its financial statements for the second and third quarters and full fiscal year 2016 and filed a Form 10-K for fiscal year 2017.
Defendants deny that they did anything wrong or violated the federal securities laws.
In a class action, one or more persons or entities (in this case, the Lead Plaintiffs), bring a lawsuit on behalf of people and entities who have similar claims. Together, these people and entities are a class, and each is a class member. Bringing a case as a class action allows the adjudication of many similar claims of persons and entities that might be economically too small to bring as individual actions. A single court resolves the issues raised in the lawsuit for all class members at the same time, except for those class members who exclude themselves, or “opt-out,” from the class.
On October 29, 2019, while Defendants’ motions to dismiss the Action were pending in the United States District Court for the Northern District of California, the parties, including Defendants' insurance carriers, participated in a mediation session. The parties were unable to reach a settlement during that mediation. Thereafter, on June 1, 2020, the Court denied Defendants’ motions to dismiss the Action.
On February 10, 2021, the parties, including Defendants' insurance carriers engaged in a mediation before retired United States District Judge Layn R. Phillips. In connection with the mediation, the parties addressed the merits of the claims and defenses and potential damages. The eleven-hour long mediation session before Judge Phillips ended with an agreement in principle to settle the Action. On February 11, 2021, the parties executed a confidential term sheet setting forth and outlining the material terms of their agreement in-principle with respect to both monetary and non-monetary terms, and any conditions of settlement of the Action ("Settlement").
On April 1, 2021, the parties entered into a Stipulation and Agreement of Settlement (the "Settlement Agreement") which set forth the terms and conditions of the Settlement. The Settlement Agreement can be viewed at www. wageworkssettlement.com.
On May 3, 2021, the Court preliminarily approved the Settlement, authorized this Notice to be disseminated to potential Settlement Class Members, and scheduled a Settlement Hearing to consider whether to grant final approval of the Settlement.
The Court did not decide in favor of Lead Plaintiffs or Defendants. Lead Plaintiffs believe that they could have won as much as $14.01 per share retained throughout the Class Period for members of the 1934 Act Class (defined below) and as much as $14.01 per share for members of the 1933 Act Class (defined below), if they won at trial. Defendants believe the Plaintiffs would not have won anything from a trial. But there was no trial because, with the assistance of the neutral third-party mediator, the Settling Parties agreed-in-principle on February 11, 2021 to a settlement of the claims raised in the Action.
The Settlement will end all the claims against Defendants in the Action and will avoid the uncertainties and costs of further litigation and any future trial. Affected investors will be eligible to receive compensation immediately, rather than, if at all, after the time it would take to resolve current and future motions, complete discovery, have a trial, and exhaust all appeals. Affected investors will also be able to better avoid the uncertainties of any recovery and collectability. Lead Plaintiffs and Lead Counsel believe the Settlement is in the best interests of the Settlement Class.
The Court has decided, subject to the exceptions set forth in Question 6 of the notice, that everyone who fits either of the below descriptions is a Settlement Class Member subject to the Settlement:
All persons and entities who purchased or otherwise acquired the common stock of WageWorks (“WageWorks Common Stock”) between May 6, 2016 and March 1, 2018, both dates inclusive, and who were damaged thereby (the “1934 Act Class”).
-or-
All persons and entities who purchased or otherwise acquired WageWorks Common Stock issued pursuant or traceable to the Registration Statement and Prospectus for WageWorks’ public offering of common stock on June 19, 2017 (the “Offering” or “June 2017 Offering”), and who were damaged thereby (the “1933 Act Class”).
Yes. There are some people who are excluded from the Settlement Class. Excluded from the Class are Defendants; the officers and directors of WageWorks; WageWorks’ successor, HealthEquity, Inc.; members of Defendants’ families and their legal representatives, heirs, successors, and assigns; and any entity in which Defendants have or had a controlling interest.
Also excluded from the Settlement Class is anyone who submits a valid and timely request for exclusion from the Settlement Class, in accordance with the procedures set forth in the Notice.
In order to participate, you must have filed a claim. If you are still not sure whether you filed a claim, you can ask for free help. You can e-mail to the Claims Administrator at [email protected].
In exchange for the Settlement and the release of the Released Claims (defined below) against the Released Defendant Parties, Defendants have agreed to pay Thirty Million Dollars ($30,000,000.00) cash (“Settlement Fund”). The Settlement Fund, plus interest earned thereon and after deduction of Court-approved attorneys' fees and expenses, which will include costs of Notice and administrative expenses, was distributed among all Settlement Class Members who submitted a valid Proof of Claim form and were found by the Court to be entitled to a distribution from the Net Settlement Fund (“Authorized Claimants”).
To qualify for a payment, you must have submitted a timely and valid Proof of Claim form. If you are uncertain whether or not you filed, please email the Claims Administrator at [email protected] and provide your full name, address, and any other relevant information that will allow us to locate your claim.
The initial distribution to eligible claimants took place on August 7, 2023. The supplemental distribution took place on September 27, 2024. Eligible claimants who cashed their initial distribution checks and whose supplemental distribution payment amount calculated to $10.00 or above were eligible for a second distribution.
The Court ordered the law firm of Barrack, Rodos & Bacine to serve as "Lead Counsel" to represent all Settlement Class Members. You will not be separately charged for these lawyers. The Court will determine the amount of Lead Counsel’s fees and expenses, which will be paid from the Settlement Fund. If you want to be represented by your own lawyer, you may hire one at your own expense.
| Plaintiff's Lead Counsel Stephen R. Basser Samuel M. Ward Barrack, Rodos & Bacine One America Plaza 600 West Broadway, Suite 900 San Diego, CA 92101 | Plaintiff's Lead Counsel Jeffrey A. Barrack 3300 Two Commerce Square 2001 Market Street Philadelphia, PA 19103 |
The Court held the Settlement Hearing on August 20, 2021, at 9:00 A.M, in Courtroom 5 of the United States Courthouse, 1301 Clay Street, Oakland, CA 94612. The Settlement was approved.
The Notice summarizes the proposed Settlement. For the precise terms and conditions of the Settlement, please see the Settlement Agreement. You may direct any questions to the Claims Administrator at [email protected], call toll free at 1-833-326-0773, or contact Lead Counsel at Barrack, Rodos & Bacine, 600 West Broadway, Suite 900, San Diego, California 92101. You may also view the Court docket in this case through the Court’s Public Access to Court Electronic Records (PACER) system at https://ecf.cand.uscourts.gov/; or by visiting the office of the Clerk of the United States District Court for the Northern District of California, Oakland Division, United States Courthouse, 1301 Clay Street, Oakland, CA 94612, on weekdays (other than court holidays) between 10:00 a.m. and 4:00 p.m.
The Settlement provides $30,000,000.00 in cash for the benefit of the Class. The Settlement Amount and any interest it earns constitute the “Settlement Fund.” The Settlement Fund, after deduction of Court-approved attorneys’ fees and expenses, Notice and Administration Expenses, Taxes, and any other fees or expenses approved by the Court, is the “Net Settlement Fund.” The Net Settlement Fund was distributed to eligible Authorized Claimants – i.e., members of the Class who submitted valid Claim Forms that were accepted for payment by the Court – in accordance with the Plan of Allocation described in the Notice.
The objective of the Plan of Allocation is to distribute the Settlement proceeds equitably among those Class Members who suffered economic losses as a proximate result of the alleged wrongdoing. The Plan of Allocation is not a formal damage analysis, and the calculations made in accordance with the Plan of Allocation are not intended to be estimates of, or indicative of, the amounts that Class Members might have been able to recover after a trial. Nor are the calculations in accordance with the Plan of Allocation intended to be estimates of the amounts that will be paid to Authorized Claimants under the Settlement. The computations under the Plan of Allocation are only a method to weigh, in a fair and equitable manner, the claims of Authorized Claimants against one another for the purpose of making pro rata allocations of the Net Settlement Fund.
The Plan of Allocation was developed in consultation with Plaintiffs’ damages expert. In developing the Plan of Allocation, Plaintiffs’ damages expert calculated the estimated amount of alleged artificial inflation in the per share prices of WageWorks common stock that was allegedly proximately caused by Defendants’ alleged materially false and misleading statements and omissions. In calculating the estimated artificial inflation allegedly caused by those misrepresentations and omissions, Plaintiffs’ damages expert considered price changes in WageWorks common stock in reaction to the public disclosure that allegedly corrected the respective alleged misrepresentations and omissions, adjusting the price change for factors that were attributable to market or industry forces, and for non fraud related WageWorks specific information.
In order to have recoverable damages in connection with purchases and/or acquisitions of WageWorks common stock during the Class Period, disclosure of the alleged misrepresentations or omissions must be the cause of the decline in the price of the WageWorks common stock. In this case, Plaintiffs allege that Defendants made false statements and omitted material facts during the period from May 6, 2016 through and including the close of trading on March 1, 2018, which had the effect of artificially inflating the prices of WageWorks common stock. Plaintiffs claim that artificial inflation was removed from the price of WageWorks common stock as the result of the alleged corrective disclosures that occurred on March 1, 2018 and on September 12, 2018, after the close of trading.
In order to have recoverable damages under the federal securities laws, disclosure of the alleged misrepresentation and/or omission must be the cause of the decline in the price of the security. In this Action, Plaintiffs allege that corrective information allegedly impacting the price of WageWorks common stock (referred to as a “corrective disclosure”) was released to the market. In order to have a “Recognized Claim Amount” under the Plan of Allocation, (i) shares of WageWorks publicly traded common stock must have been purchased or otherwise acquired during the Class Period and held through at least one corrective disclosure; (ii) shares of WageWorks publicly traded common stock must have been purchased or otherwise acquired pursuant to certain registration statements, and held through at least one corrective disclosure.
