05/20/2026
On April 27, 2026, U.S. District Judge Jennifer L. Hall issued an order substantially denying the Defendants’ motion to dismiss the securities fraud class action against Humana, Inc. and its former CEO and CFO.
Lead Plaintiff SEB, one of the largest institutional investors in Sweden, alleges that Humana, its former CEO Bruce Broussard, and its former CFO Susan M. Diamond repeatedly misrepresented the strength of Humana’s core Medicare Advantage business following the COVID-19 pandemic, issuing false and misleading statements with respect to the supposedly stable level of healthcare utilization by Humana’s members, and falsely represented that it would maintain its high Medicare Advantage Star ratings—ratings awarded by the Centers for Medicare & Medicaid Services for the quality of healthcare provided to Medicare members, which can result in enormous amounts of additional revenue. Despite these frequent assurances about these two key earnings drivers for Humana, Plaintiff alleges that, as the effects of the pandemic abated, Defendants knew, with respect to utilization, that delays in healthcare services had created a massive backlog of healthcare demand, and that a broad-based surge in utilization was significantly increasing the amount the company was paying for member healthcare. Further, as a result, the company undertook aggressive cost-cutting measures to reduce costs, including improper denials of medical services and massive layoffs. SEB alleges that Defendants knew that these cost-cutting measures were resulting in declines in the quality of Humana’s benefit plans, detrimentally affecting its Star ratings, and ultimately leading to sharp drop-offs in Star-related revenue. The truth regarding Humana’s increased utilization and the damage to its Star ratings was revealed in a series of disclosures from June 2023 to October 2024.
Read more at https://ktmc.com/news/ktmc-and-seb-funds-ab-defeat-motion-to-dismiss-in-humana-securities-fraud-class-action
