Investors in mobile healthcare provider DocGo have asked a federal court in Manhattan to grant preliminary approval of a $12.5 million settlement resolving claims that the company misled stockholders before a $432 million New York City contract to provide emergency migrant housing drew public scrutiny.
According to a motion filed Wednesday, the settlement was reached after an unsuccessful mediation session in September. “Further discussions and negotiations subsequently took place with the Mediator, and ultimately, the Parties accepted a Mediator’s proposal to resolve the Litigation for $12.5 million, subject to the negotiation of final settlement terms and Court approval,” the filing states.
Lead counsel for the proposed class plans to request up to 33%, or approximately $4.1 million, in attorney fees, along with up to $250,000 in expenses. The class has also asked for certification solely for purposes of the settlement.
Allegations of Misleading Statements
The 2023 lawsuit claims DocGo “overstated the efficacy of its mobile health and medical transportation services” in earnings calls, press releases, and filings, inflating stock prices. Shares dropped after public scrutiny questioned the company’s services for migrants in New York City.
DocGo, based in Manhattan, was initially formed as a blank check company to raise capital ahead of its 2020 initial public offering, later merging with private firm Ambulnz.
As public scrutiny intensified, former CEO Anthony Capone allegedly reassured investors that the company was not facing a “revenue cliff” following the expiration of a city contract. Capone is also accused of misleading investors during an August 2023 interview about DocGo’s pursuit of a $4 billion, five-year U.S. Customs and Border Protection contract and its efforts to enroll migrants in New York State Medicaid.
