Lead Plaintiffs, the Public Employees’ Retirement System of Mississippi, the Government Employees’ Retirement System of the Virgin Islands (“VIGERS”), and the Public Employees Retirement Association of New Mexico, on behalf of themselves and the Settlement Class of investors in the common stock of WageWorks, Inc. (“WageWorks”) and defendants in In re: WageWorks, Inc. Securities Litigation have agreed to settle the litigation for $30,000,000.00 in cash. On May 5, 2021, the court granted preliminary approval of the proposed settlement, and directed that the Notice and Proof of Claim forms be made available to all potential Class Members.*
If you are a member of the Class, your rights will be affected and you may be eligible for a payment from the settlement, unless you timely request to be excluded. The Settlement Class consists of:
All persons and entities who purchased or otherwise acquired WageWorks common stock between May 6, 2016 and March 1, 2018, inclusive, and who were damaged thereby;
-or-
All persons and entities who purchased or otherwise acquired WageWorks common stock issued in the company’s public offering of common stock on June 19, 2017 pursuant or traceable to the Registration Statement and Prospectus filed with the Securities and Exchange Commission (the “Offering”), and who were damaged thereby.
Certain persons and entities have been excluded from the Class (see paragraph 6 of the Notice), as are those who request exclusion pursuant to the instructions set forth in the Notice. Please read the Notice carefully to fully understand your rights and options. The Notice is available here and the Proof of Claim form is available here. You may also visit the Settlement website established by Kroll Settlement Administration, at www.WageWorksSettlement.com, for more information about the Settlement.
Payments to eligible claimants will be made only after any appeals are resolved, and after the completion of all claims processing. Please be patient, as this process will take some time to complete.
BACKGROUND OF THE LITIGATION
This is a class action arising from allegations of false and misleading financial statements and secondary stock offering documents by WageWorks, and members of its senior management team and board of directors. On March 1, 2018, WageWorks 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. And on April 5, 2018, WageWorks announced 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, WageWorks 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.
On March 9, 2018, VIGERS filed a class action complaint alleging violations of the Securities Exchange Act of 1934 (“1934 Act”) in the United States District Court for the Northern District of California. On August 7, 2018, the Court issued an order appointing Lead Plaintiffs and approving their selection of Barrack, Rodos & Bacine as Lead Counsel.
On May 16, 2019, Lead Plaintiffs filed a Consolidated Class Action Complaint, which alleged violations of the 1934 Act as well as the the Securities Act of 1933 (“1933 Act”). Lead Plaintiffs, the Public Employees’ Retirement System of Mississippi and VIGERS (collectively the “1934 Act Plaintiffs”), allege that, between May 6, 2016 and March 1, 2018, WageWorks, Joseph Jackson the company’s former CEO, and Colm Callan, the company’s former CFO, 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 alleged violations of the 1933 Act by WageWorks, Jackson, Callan, and WageWorks directors Mariann Byerwalter, Thomas A. Bevilacqua, Bruce G. Bodaken, Jerome D. Gramaglia, John W. Larson, and Robert L. Metzger (the “Outside Director Defendants”) based on the incorporation of false and misleading statements into the company’s Registration Statement and Prospectus for the issuance of 2.5 million shares of WageWorks common stock in a secondary offering on June 19, 2017 (the “Offering”), 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 July 26, 2019, the defendants moved to dismiss the complaint. On October 29, 2019, while the motion was pending, and following extensive pre-mediation briefing, the parties engaged in a mediation before a respected mediator. The parties were unable to reach a settlement during this mediation. On June 1, 2020, the Court denied defendants’ motions to dismiss.
Thereafter, following substantial document discovery, on February 10, 2021, the parties engaged in an all-day mediation session before the Hon. Layn R. Phillips (Ret.), during which the parties reached agreement on the terms of a settlement. The April 1, 2021 Stipulation and Agreement of Settlement is available here.
On May 5, 2021, the Court issued an Order Preliminarily Approving Settlement and Providing for Notice, and directed that the Notice and Claim Form to be issued and made available to all potential Class Members. Pursuant to the Court’s order (available here), Lead Plaintiff, working in conjunction with Kroll Settlement Administration, the court-appointed claims administrator, is disseminating the Notice, available here and on the settlement website at: www.WageWorksSettlement.com.
IMPORTANT DATES AND DEADLINES
Claim Filing Deadline: Claim Forms must be postmarked no later than September 14, 2021 to be eligible for a payment from the Settlement.
Exclusion Deadline: To exclude yourself from the Class, you must submit a written request for exclusion so that it is received no later than July 30, 2021, in accordance with the instructions in the Notice.
Objection Deadline: Any objections to the proposed Settlement, the proposed Plan of Allocation, and/or the request for attorneys’ fees and reimbursement of expenses, must be received no later than July 30, 2021, in accordance with the instructions in the Notice.
The Settlement Hearing: The Settlement Hearing will be held on August 20, 2021 at 9:00 a.m., before the Honorable Jeffrey S. White, in Courtroom 5 of the United States Courthouse, 1301 Clay Street, Oakland, CA 94612.
More information about the litigation and the settlement are available at the website established by Kroll Settlement Administration at www.WageWorksSettlement.com or by emailing Barrack, Rodos & Bacine at wageworksettlement@barrack.com.
*All capitalized words are defined in the Settlement Agreement, available here.