CGI Group (GIB -4.5%) shares are sliding after Massachusetts officials announce they have undertaken a review of their legal options regarding the Healthcare.gov fiasco. James Chanos had alluded to a such a fall-out at the beginning of the month.
The state has paid $11M of its $69M contract with CGI and "will not pay a penny more until a functioning website has been delivered," according to Jason Lefferts, a spokesman for Massachusetts' insurance market.
Value Walk writes that "According to legal analysts, the growing storm of public criticism by state officials against CGI ... is an early indicator of legal problems for major website providers down the road." One attorney observes, "I would expect all sorts of litigation related to this, but nobody is interested in filing that now because they need the cooperation of these same people to get their systems up and running."