Clover Health will have to face investors who say the insuretech misled them ahead going public Two years ago, a federal court ruled Monday.

The plaintiffs allege that the insuretech didn’t disclose it was under investigation by the Justice Department and misled them about its operations. Clover Health declined to comment on the litigation.

Judge Aleta Trauger of the US District Court for the Middle District of Tennessee rejected Clover Health’s motion to dismiss the case, writing in her opinion that the plaintiffs have met the standard to allow the case to proceed.

The plaintiffs identified instances when Clover Health made false or misleading statements and failed to disclose material facts, Trauger wrote. In addition, the Justice Department investigation is “likely to uncover wrongdoing and flaws,” she wrote.

“Clover will have ample opportunity to argue that that characterization was false,” Trauger wrote. “The court, however, is required, at this stage, to accept the plaintiffs’ particularized, well-pleaded allegations as true for the purposes of the motion to dismiss.”

A Clover Health shareholder initiated the lawsuit on behalf of those who invested in the company between Oct. 4, 2020, and Feb. 3, 2021. The plaintiffs’ attorneys are seeking class action status for the lawsuit, which would enable all affected Clover Health investors to receive compensation.

According to the complaint, Clover Health made false or misleading statements about its conduct and its business practices and it didn’t inform investors it was under federal investigation for alleged violations of the False Claims Act and other crimes including kickbacks and undisclosed deals with third parties owned or controlled by Clover Health insiders.

Clover Health merged with Social Capital Hedosophia Holdings, a special purpose acquisition company, in January 2021. Just weeks later, Hindenburg Research published a report revealing the Justice Department investigation and detailing other actions taken by the company and Social Capital CEO Chamath Palihapitiya that it characterized as harmful to investors.

Shareholders lost hundreds of millions of dollars as a result when Clover Health stock prices fell on the news, according to the lawsuit.

The plaintiffs further allege that Clover Health unlawfully enticed providers to use its Clover Assistant software, which is designed to identify opportunities to assign Medicare patients higher risk-assessment scores, with kickbacks in the form of gifts and payments.

In addition, the lawsuit accuses Clover Health of exaggerating its organic business growth, which the plaintiffs say the company attributed to its technology. Instead, Clover Health drove business via undisclosed arrangements with companies owned and/or operated by Hiram Bermudez, its head of sales , according to the lawsuit.