Shepherd, Finkelman, Miller & Shah, LLP
Shepherd, Finkelman, Miller & Shah, LLP
866-540-5505 877-891-9880

Dedicated Client Advocacy

HCA Settles $215M for Failure to Disclose Whistleblower Case

A company is obligated to disclose to shareholders anything within its knowledge that could affect its stock price. Failure to do so, could result in potential liability. For example, a class of shareholders filed a securities lawsuit against HCA Holdings Inc. ("HCA") alleging that prior to its $4.3 billion initial public offering ("IPO"), HCA failed to disclose an ongoing internal investigation of unnecessary cardiac procedures after a complaint made by a whistleblower. Schuh v. HCA Holdings, Inc., et al. No. 3:11-cv-01033 (M.D. Tn. 2011).

The HCA investors claimed that HCA's own investigation indicated heart procedures were routinely being performed on patients without significant heart disease. In other words, unbeknownst to investors, HCA was performing unnecessary, but profitable procedures prior to its IPO. After investments had been made in the public offering, the truth surfaced, which ultimately led to a 60 percent decline in growth targets. As a result, while the original shares were offered at $30 per share in March 2011, the shares plummeted to $18.81 per share by that October. More recently, albeit its refusal to admit to any wrongdoing, HCA has agreed to pay $215 million to settle the securities lawsuit.

The legal team at SFMS has substantial experience representing diverse clients on both sides of investment-related disputes and in regulatory proceedings and investigations before government agencies and industry entities, as well as SEC whistleblowers. If you have any questions regarding this subject or this posting, please contact Chiharu Sekino (csekino@sfmslaw.com) or Alec Berin (aberin@sfmslaw.com). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP, is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS also maintains affiliate offices in London, England, and Milan, Italy, and is an active member of Integrated Advisory Group (www.iaginternational.org), which provides our firm with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

SOURCE

Kass, Dani. "HCA To Pay $215M To Settle Shareholder Class Action." Law360. Last modified on November 4, 2015.

No Comments

Leave a comment
Comment Information