What is the expected timeline for the investigation, any potential settlement, or court action, and how might that affect investor sentiment?

Timeline outlook

Schall’s shareholder‑rights litigation practice typically moves from the opening of an inquiry to a formal demand‑for‑production and a “sham‑settlement” offer within 6–9 months. If the company rejects the request, a complaint filing usually occurs 9–12 months after the investigation’s start, followed by a pre‑trial conference roughly 3–4 months later. In practice, most cases resolve through a settlement or dismissal before a trial, so you can expect a potential settlement or a motion to dismiss somewhere in the 12–18‑month window. Anything beyond that would likely be a full‑scale court trial, which is rare for these types of securities‑fraud suits.

Investor‑sentiment impact

The public disclosure of an active fraud investigation is already depressing sentiment—reflected in the −70 news‑sentiment score and a sharp‑‑to‑moderate price dip on heavy‑volume selling since the release. As the 6‑month investigation milestone approaches, the market will watch for any updates from SelectQuote (SLQT) (e.g., a response letter, a settlement offer, or a “no‑cause” filing). A credible settlement offer or a quick resolution that clears the company would likely trigger a bounce‑back in price and a short‑cover rally. Conversely, a prolonged silence or a move toward litigation will keep the stock on the down‑trend side, sustaining bearish pressure and widening the bid‑ask spread as risk‑averse participants stay on the sidelines.

Trading implications

• Short‑to‑medium‑term: Stay short or keep a defensive overlay (e.g., a bear put spread or a modest position‑size short) until at least the 6‑month mark when the investigation’s first substantive update is expected.
  
• Medium‑term (12‑18 months): If a settlement is announced—especially one with modest cash terms—consider flipping to a risk‑reversal or a bull call spread to capture upside with limited downside.
  
• Watch‑list: Monitor SLQT’s SEC filings, press releases, and any subsequent “letter to shareholders”. A surge in analyst coverage or any insider‑trading activity can give early clues about the likely outcome and help calibrate entry/exit points.
  

In short, the investigation is likely to remain mid‑term (6–12 months) before a settlement or court move, and the stock will stay price‑pressed on the downside until a clear resolution. Position accordingly, with a bias toward defensive, short‑duration tactics until the first material update arrives.