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Levi & Korsinsky, LLP has commenced an investigation into the fairness of the merger of Clover Health Investments Corp. (“Clover” or the “Company”) (NASDAQ: CLOV) and Social Capital Hedosophia Holdings Corp. III (“Social Capital”). Clover Health provides healthcare insurance services and purports to use proprietary technology to collect, structure, and analyze health and behavioral data. On January 7, 2021, Clover went public through a merger with Social Capital Hedosophia Holdings Corp. III and began to trade under the symbol CLOV on the NASDAQ. On February 4, 2021, Hindenburg Research published a report about Clover titled “Clover Health: How the “King of SPACs” Lured Retail Investors Into a Broken Business Facing an Active, Undisclosed DOJ Investigation.” The report detailed that Clover “has not disclosed that its business model and its software offering, called the Clover Assistant, are under active investigation by the Department of Justice (DOJ), which is investigating at least 12 issues ranging from kickbacks to marketing practices to undisclosed third-party deals[.]” Furthermore, the report went on to note that “multiple former [Clover] employees explained that much of Clover’s sales are fueled by a major undisclosed relationship between Clover and an outside brokerage firm controlled by Clover’s Head of Sales, Hiram Bermudez.” Following the release of this report shares of Clover stock fell $1.72 per share to close at $12.23 per share on February 4, 2021, and have continued its decline on the subsequent trading day. Levi & Korsinsky is presently investigating whether the board and certain executives breached their fiduciary duties and committed violations of securities laws in relation to the merger.
The Clover merger investigation concerns whether the Board of Social Capital has harmed stockholders by agreeing to enter into this transaction and whether all material facts have been properly disclosed to stockholders.
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