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  "documentTitle": "Progyny, Inc. (PGNY)",
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  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2023-02-07 00:00:00",
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  "notes": "The slide uses a red flag icon to signal the fraud warning.",
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      "kind": "paragraph",
      "text": "Medical Manager was a healthcare software company formed in July 1996. The Company went public in 1997 and embarked on an aggressive roll-up strategy, eventually acquiring ~135 companies in the following three years. In July 1999, Medical Manager was acquired for $1.4 billion by Synetic, a supplier of plastic/filtration products whose e-commerce subsidiary CareInsite was later spun-off. The combined company took the Medical Manger name, and most senior management roles went to former Medical Manager executives. WebMD merged with Healtheon in 1999 and subsequently acquired Medical Manager (including its publicly traded internet subsidiary CareInsite) in a $2.1 billion deal that closed in September 2000. In 2005, ten executives from Medical Manager were indicted for conspiracy and money laundering related to a wide range of fraudulent accounting practices related to acquired companies designed to inflate earnings between 1997 and 2003. Six additional executives later pleaded guilty.",
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      "text": "Kang and Sessions were convicted of conspiring to engage in fraudulent accounting practices intended to artificially inflate the quarterly revenues of Medical Manager in order to meet and exceed the expectations of financial analysts, and thus to fraudulently inflate the market price of Medical Manager stock and, after its acquisition by WebMD, that company's stock. According to evidence presented during the nearly two-month trial, the conspiracy involved a number of fraudulent practices, including inflating the company's revenue by engaging in \"round-trip\" sales with software dealers that Medical Manager was acquiring. Evidence at trial proved that the defendants participated in a scheme to inflate the purchase price for the companies that Medical Manager was acquiring in order to compensate these companies for the simultaneous purchase of Medical Manager software that Medical Manager compelled them to purchase as part of their acquisition. Evidence presented at trial proved that the defendants also inflated Medical Manager's revenue by causing companies acquired by Medical Manager to reclassify revenue they had already recognized - and thus already included in their earnings - as \"deferred revenue,\" which was not included in earnings. Once the books of the acquired companies were combined with those of Medical Manager, the conspirators recognized the deferred revenue again, thereby fraudulently increasing Medical Manager's revenue and earnings. Kang and Sessions were also found guilty of causing companies Medical Manager was acquiring to fraudulently inflate their accrued liability accounts and reserves for various expenses before the financial statements of the target companies were combined with those of Medical Manager. Once the financial statements were combined, the conspirators caused Medical Manager to reverse those accrued liability accounts and reserves into earnings for Medical Manager.",
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      "text": "Source: DOJ press release, Case 9:05-cr-00928-DCN document 10 filed 12/15/05",
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      "kind": "title",
      "text": "A Wide-Ranging Accounting Fraud Occurred At Medical Manager Before And After Its Acquisition by WebMD",
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      "kind": "title",
      "text": "Excerpt From DOJ Press Release Announcing Conviction of Two Medical Manager Executives",
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