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WellCare Shares Collapse After FBI Raid Wednesday

PAUL LAMISON / News Channel 8

The FBI raided WellCare Health Plans at 8735 Henderson Rd. in Tampa on Wednesday.

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The Tampa Tribune

Published: October 25, 2007

Previous Coverage: FBI Raids Wellcares Tampa Office
Photo Gallery Of The Raid | WFLA Josh Thomas Report

TAMPA - Shares in Wellcare Health Plans were hammered this morning, dropping more than $60 at one point in heavy trading on the New York Stock Exchange, as investors fled the stock after a federal raid on the company Wednesday.

At 11 a.m. shares were down $60.53, or more than 50 percent, to $54.64.

Trading in the Tampa company's shares initially was frozen after the markets opened this morning after Wellcare Chairman and Chief Executive Officer Todd Farha said in an audio commentary posted on the company's Web site that Wellcare would not cancel its Nov. 5 phone conference with investors and analysts to discuss third-quarter earnings despite the raid by FBI and other agents at its headquarters Wednesday.

The reason for the raid remained unclear Thursday morning, but that didn't stop investors from bolting the stock. Trading in the stock was heavy, with more than 6 million shares trading hands, 10 times the average.

About 200 agents from the FBI and other federal and state agencies descended on the headquarters of WellCare and seized laptop computers, files and boxes of documents. The search of the headquarters lasted most of the day.

The company has declined to comment on the raid, other than to confirm that state and federal agents searched its four-building campus on Henderson Road and to assure clients that services would not be affected.

None of the agencies involved in the raid would comment on the reason for the search at the office of one of the nation's largest health insurers for government programs.

Agents from the FBI, U.S. Department of Heath & Human Services, and the Florida attorney general's Medicaid Fraud Control Unit participated in Wednesday's search.

WellCare, which is one of the Tampa Bay area's largest and most successful publicly-held companies, provides health and drug coverage for a combined 2.3 million Medicare and Medicaid beneficiaries nationwide.

The company, which booked net income of $139 million on $3.8 billion in revenue last year, said it is cooperating with authorities and that none of its health plan members would be affected.

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