InnovAge Holding Corp. agreed to a $27 million cash settlement to resolve a securities fraud class action brought by shareholders who said the Denver-based senior care company hid serious care deficiencies before and after its March 2021 IPO. Judge William J. Martinez granted final approval to the InnovAge lawsuit settlement on December 10, 2025, ending claims against the company, its former CEO and CFO, board members including former Florida Governor Jeb Bush, private equity backers Welsh Carson Anderson & Stowe and Apax Partners, and the IPO underwriters.1Cohen Milstein. Court Approves $27M Cash Settlement in InnovAge Securities Fraud Class Action
What Investors Said InnovAge Hid
InnovAge priced its IPO at $21 per share on March 4, 2021, raising roughly $399 million in gross proceeds. The offering documents told investors the company could “consistently deliver high-quality care” and described a “predictable” model for “sustained, organic census growth.”2Cohen Milstein. InnovAge Amended Complaint
The complaint said those claims left out what was actually happening inside the PACE centers. Plaintiffs alleged that an aggressive push to maximize enrollment had produced severe staff shortages, unmanageable caseloads, and a backlog of patients whose healthcare needs were not being met. Some facilities allegedly failed to provide covered services, failed to ensure specialist access, and failed to coordinate care. Management, the complaint said, knew regulators were likely to scrutinize these problems and that the Centers for Medicare and Medicaid Services could suspend new enrollments.3BusinessWire. InnovAge Holding Corp. Investors Have Opportunity to Lead Class Action Lawsuit Plaintiffs also alleged that InnovAge management ordered staff to “clean up” evidence of service delays and gaps before anticipated audits in California and Colorado.2Cohen Milstein. InnovAge Amended Complaint
The Disclosures That Sank the Stock
On September 21, 2021, InnovAge disclosed that CMS had frozen new enrollments at its Sacramento PACE center after a May 2021 audit found the facility “substantially failed” to provide medically necessary services. Auditors said participants were not being referred to needed specialists in ophthalmology, dermatology, and nephrology, and recommendations from specialists who did see patients were not being followed up on.4CMS. InnovAge California PACE Sacramento Sanction Notice The stock fell roughly 25% the next day, closing at $8.75.5Robbins LLP. InnovAge Holding Corp.
On December 22, 2021, CMS and Colorado state regulators suspended new enrollments at all of InnovAge’s Colorado PACE centers. Their audits found that staffing failures affected 100% of reviewed participants and that 74% were not receiving care that met their needs.2Cohen Milstein. InnovAge Amended Complaint The stock eventually traded as low as $6.30, a 70% decline from the IPO price.5Robbins LLP. InnovAge Holding Corp. Maureen Hewitt, who had led InnovAge for 15 years and was named as a defendant, resigned effective January 1, 2022.6MarketWatch. CEO Who Built New Model for Senior Care Resigns Amid Regulatory Scrutiny
Who Was Sued and Under What Laws
The case, El Paso Firemen & Policemen’s Pension Fund v. InnovAge Holding Corp., was filed in the U.S. District Court for the District of Colorado in 2021. Three public pension funds served as lead plaintiffs: the El Paso Firemen & Policemen’s Pension Fund, the San Antonio Fire & Police Pension Fund, and the Indiana Public Retirement System, with Cohen Milstein as lead counsel.7Cohen Milstein. Texas and Indiana Pension Funds v. InnovAge Holding Corp.
Defendants included InnovAge, former CEO Maureen Hewitt, former CFO Barbara Gutierrez, board members including Jeb Bush, the private equity firms Welsh Carson and Apax, and all eleven IPO underwriters led by J.P. Morgan, Barclays, Goldman Sachs, and Citigroup.8GlobeNewsWire. Court Approves $27M Cash Settlement in InnovAge Securities Fraud Class Action Plaintiffs sued under Sections 11 and 12(a)(2) of the Securities Act of 1933, which govern liability for misleading registration statements, and Section 10(b) of the Securities Exchange Act of 1934.9Cohen Milstein. InnovAge Second Amended Complaint
How the Case Reached Settlement
In December 2023, Judge Martinez ruled on motions to dismiss from InnovAge, its officers, and the private equity defendants. The court dismissed 37 of the 43 challenged statements but let six proceed, keeping the core of the case alive.10GovInfo. Court Order, El Paso Firemen v. InnovAge Holding Corp. A separate January 2024 ruling on the underwriters’ motion granted it in part and denied it in part; reporting indicates all but one of the underwriter defendants were dismissed, though the record does not fully reflect which claims survived against the remaining underwriter.7Cohen Milstein. Texas and Indiana Pension Funds v. InnovAge Holding Corp.
The court certified a nationwide class on January 8, 2025. The parties then reached the $27 million cash deal, which received preliminary approval in mid-2025 and final approval on December 10, 2025. The court noted that the underwriters’ due diligence defense raised “novel legal issues” that would have required resolution at trial.10GovInfo. Court Order, El Paso Firemen v. InnovAge Holding Corp.
Who Is in the Class
The certified class covers anyone who purchased InnovAge common stock either in or traceable to the March 4, 2021 IPO, or on the open market between May 11, 2021, and December 22, 2021.11Zacks Law. InnovAge Holding Inc. Settlement
What Class Members Receive
The court approved $5.4 million in attorney fees, equal to 20% of the fund, along with $339,100 in litigation expense reimbursements and $15,000 service awards to each of the three lead plaintiffs. Payments to eligible class members are calculated pro rata based on the date and price of each investor’s InnovAge purchases.10GovInfo. Court Order, El Paso Firemen v. InnovAge Holding Corp.
The claims filing deadline was November 5, 2025. Strategic Claims Services served as claims administrator, and as of mid-2026 the administrator’s final report has been submitted, meaning the distribution process is advancing toward completion. If you did not file by the deadline, you cannot participate in this distribution.12Strategic Claims Services. InnovAge Securities Litigation
Other Regulatory Matters Not Covered by the Settlement
The $27 million settlement resolved the securities class action only. InnovAge has disclosed in SEC filings that it faces ongoing “civil investigative demands initiated by federal and state agencies” separate from the private litigation.13SEC. InnovAge Holding Corp. SEC Filing The company has acknowledged concerns that its submissions to government payors may contain “inaccurate or unsupportable information, including regarding risk adjustment scores of participants.”14InnovAge. InnovAge Annual Report No public resolution of those investigations has been announced.
InnovAge continues to operate its PACE programs, serving roughly 8,050 participants across 20 centers in six states, with shares trading around $9.28 as of mid-2026, still well below the $21 IPO price.15InnovAge. InnovAge Investor Relations