This lawsuit alleges Trinet misrepresented to investors the accurate costs associated with workers compensation claims. Specifically, that the company was experiencing greater than announced worker compensation costs even after analysts queried executives about the lower-than-industry average cost projections..
Trinet Group, Inc. (Trinet) provides comprehensive human resources (HR) services to small to medium-sized businesses, enabling clients to outsource HR functions such as payroll processing, human capital consulting, employment law compliance and employee benefits, including health and workers compensation insurance and retirement plans. Trinet sells its products through a direct sales force and targets vertical markets, including technology, life sciences, property management, professional, banking and financial, retail, manufacturing and hospitality services.
The company held its initial public offering on March 27, 2014.
What investors are part of this class action ? The class period is currently defined as all persons who purchased Trinet Group Inc. common stock between May 5, 2014 and August 3, 2015, inclusive (the “Class Period”). Trinet Group, Inc. common stock trades under the symbol “TNET”.
Procedural Status. The lawsuit was filed on August 07, 2015 and is captioned Welgus v. Trinet Group, Inc. et al. It was filed in the California Northern District Court. Its civil docket number is 5:15cv03625. The lead plaintiff deadline is October 6, 2015.
The complaint alleges that during the Class Period, Trinet’s publicly stated financial outlook was based on materially false and misleading statements regarding the company’s financial condition and quarterly and year-end revenue and earnings outlook for fiscal 2014 and 2015, which financial outlook did not have a reasonable basis because Trinet knew or deliberately disregarded and failed to disclose that:
· Trinet’s processes and methodologies for analyzing and accruing claims failed to properly account for historical claims trends;
· Trinet’s forecasting process failed to properly incorporate relevant historical and current claims trends; and
· Trinet was experiencing growing claims trends in medical and workers compensation that negatively affected current and future business prospects.
Following the disclosure of its second quarter fiscal 2015 financial results, Trinet’s stock price declined 38%, from a close of $26.69 per share on August 3, 2015 to a close of $16.33 per share on August 4, 2015, on high trading volume.
This case is in the notice period. When a shareholder brings suit under certain federal securities law, generally that shareholder must give notice via a press release. This notice starts a 60 day period of time when any shareholder can investigate the underlying claims of the lawsuit and then elect to bring suit as well. At the end of this 60 day period, the court appoints one shareholder (or a group of shareholders) to prosecute the securities litigation. We will review the docket again in June and update this page as warranted.