Inovalon Sued by Funds Over $7.3 Billion Private Equity Sale

Three pension funds sued Inovalon Holdings Inc. in Delaware, claiming its leaders steered the health analytics company into an underpriced $7.3 billion private equity sale that favored insiders while keeping the public in the dark about conflicts of interest and superior offers.

The heavily redacted 113-page lawsuit, made public Monday, targets Inovalon, members of its board, and billionaire founder Keith Dunleavy, plus entities affiliated with Dunleavy and another early backer, former board member Andre Hoffmann, whose family controls pharmaceutical giant Roche.

The suit accuses them of misleading investors about $1.3 billion in rollover equity for Dunleavy and Hoffmann, post-transaction pay ...