NEW YORK, Nov. 18, 2024 /PRNewswire/ — Pomerantz LLP announces that a class action lawsuit has been filed against PACS Group, Inc. (“PACS” or the “Company”) (NYSE: PACS). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
The class action concerns whether PACS and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
You have until January 13, 2024, to ask the Court to appoint you as Lead Plaintiff for the class if you are a shareholder who purchased or otherwise acquired PACS securities during the Class Period. A copy of the Complaint can be obtained at www.pomerantzlaw.com.
[Click here for information about joining the class action]
On November 4, 2024, Hindenburg Research (“Hindenburg”) published a report based on a 5-month investigation that included interviews with 18 former PACS employees, competitors, and an analysis of more than 900 PACS facility cost reports. The report alleged that the Company had “abused a COVID-era waiver” in a “scheme” that involved falsely submitting false Medicare claims which “drove more than 100% of PACS’ operating and net income from 2020 – 2023, enabling PACS to IPO in early 2024 with the illusion of legitimate growth and profitability.” The report further alleged that the Company engaged in a scheme to maintain revenue by “bill[ing] thousands of unnecessary respiratory and sensory integration therapies to Medicare Part B regardless of clinical need or outcomes.” The report also alleged that PACS engaged in a widespread practice of falsifying documentation, including by engaging in a “scheme whereby PACS attempts to fool regulators by ‘renting’ licenses from third parties to ‘hang’ on buildings” and then “either employs unlicensed administrators or has administrators manage multiple buildings in excess of state mandated limits.” Similarly, the report alleged that the Company engaged in a scheme related to licensure and staffing of nurses, whereby “PACS secretly lists uncertified nurse aides (NAs) as certified in the system, in an apparent scheme to cheat staffing ratios” and “retroactively add fake RN hours” in order “to meet minimum staffing requirements, boost star ratings, and avoid costly penalties.”
Following publication of the Hindenburg report, PACS’s stock price fell $11.93 per share, or 27.78%, to close at $31.01 per share on November 4, 2024.
Then, on November 6, 2024, PACS announced that it would postpone its fiscal third quarter 2024 earnings release. The Company further disclosed it had “received civil investigative demands from the federal government regarding the Company’s reimbursement and referral practices that may or may not be related to this week’s third-party report.”
On this news, PACS’s stock price fell $11.45 per share, or 38.76%, to close at $18.09 per share on November 6, 2024.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.
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CONTACT:
Danielle Peyton
Pomerantz LLP
646-581-9980 ext. 7980
SOURCE Pomerantz LLP
