PACS Group, Inc. Investors: January 13, 2025 Filing Deadline in Securities Class Action - Contact Lieff Cabraser

Rhea-AI Summary

PACS Group, a senior care facilities operator, faces a securities class action lawsuit with a lead plaintiff deadline of January 13, 2025. The lawsuit covers investors who purchased PACS stock between April 11, 2024, and November 5, 2024, including those who bought shares during the company's IPO and SPO.

The lawsuit alleges PACS made false statements and failed to disclose a scheme to submit fraudulent Medicare claims, bill unnecessary therapies, and falsify documentation. Following a Hindenburg Research report on November 4, 2024, PACS stock fell 27.78% to $31.01. The company subsequently postponed its Q3 earnings release and disclosed federal investigation demands, causing another 38.76% stock drop to $18.09 on November 6, 2024.

Positive

• None.

Negative

• Securities class action lawsuit filed against the company
• Allegations of Medicare fraud scheme that drove over 100% of operating income (2020-2023)
• Claims of billing thousands of unnecessary therapies to Medicare
• Accusations of falsifying documentation for licensure and staffing
• Stock price dropped 27.78% following Hindenburg Research report
• Additional 38.76% stock decline after federal investigation announcement
• Q3 earnings release postponed due to federal investigation
• Received civil investigative demands from federal government

Insights

Legal Expert

This class action lawsuit against PACS Group represents a significant legal and financial risk. The allegations of Medicare fraud, including false claims submission and unnecessary billing, could result in substantial penalties under the False Claims Act. The reported $11.93 and $11.45 stock price drops following the Hindenburg report and subsequent federal investigation announcement indicate severe market impact. The dual claims under both the Securities Act of 1933 and Exchange Act of 1934 strengthen the case's legal foundation. The federal government's civil investigative demands particularly concerning reimbursement practices add regulatory scrutiny that could lead to additional penalties beyond shareholder litigation. The comprehensive nature of the alleged fraud scheme, supported by extensive interviews and documentation, suggests potential long-term financial and operational consequences for PACS.

Financial Analyst

The market reaction to these allegations has been severe, with the stock losing over 66% of its value in just two trading sessions. The postponement of Q3 earnings amid federal investigation signals potential accounting irregularities that could lead to restatements. If the allegations prove true that fraudulent Medicare claims drove over 100% of operating income from 2020-2023, PACS's entire business model and financial stability are at risk. The timing of these revelations, occurring shortly after both an IPO and SPO, raises serious concerns about the integrity of those offerings and could trigger significant liability to investors. The company's market cap has already declined substantially and further downside risk exists as investigations unfold and potential regulatory penalties materialize.

Healthcare Industry Expert

The alleged fraudulent practices detailed in the Hindenburg report highlight systematic abuse of healthcare regulations and Medicare reimbursement systems. Falsifying patient acuity levels and billing for unnecessary treatments represents a fundamental breach of healthcare compliance. The practice of "renting" licenses and manipulating staffing documentation to inflate star ratings is particularly concerning as it directly impacts patient care quality and safety. These allegations, if proven, could result in facility license revocations, exclusion from Medicare programs and severe operational disruptions across PACS's network of senior care facilities. The company's ability to maintain facility operations and attract new residents could be permanently impaired.

SAN FRANCISCO, CA / ACCESSWIRE / December 9, 2024 / National plaintiffs law firm Lieff Cabraser Heimann & Bernstein, LLP encourages investors in PACS Group, Inc. ("PACS" or the "Company") (NYSE:PACS) who purchased or otherwise acquired PACS common stock between April 11, 2024, and November 5, 2024, inclusive (the "Class Period"), including investors who purchased PACS common stock pursuant and/or traceable to the registration statements issued in connection with PACS's April 11, 2024 initial public offering ("IPO"), and/or the Company's September 6, 2024secondary public offering ("SPO"), to contact us immediately regarding a pending securities class action against PACS. The deadline to apply to be lead plaintiff is January 13, 2025.

Class Period: April 11, 2024 - November 5, 2024

Lead Plaintiff Motion Deadline: January 13, 2025

Case information: lieffcabraser.com/securities/pacs-group

Contact us: Email or text investorinfo@lchb.com or call 1-800-541-7358

PACS, incorporated in California and headquartered in Farmington, Utah, is a holding company that, through its subsidiaries, operates senior care facilities, skilled nursing facilities, and assisted living facilities.

The actions allege that PACS made materially false and misleading statements and omissions throughout the Class Period, including in its IPO and SPO registration statements, and failed to disclose material adverse facts about its business, operations, and prospects, including: (1) that the Company conducted a "scheme" to submit false claims to Medicare which "drove more than 100% of PACS' operating and net income from 2020 - 2023"; (2) that PACS conducted a "scheme" to "bill thousands of unnecessary respiratory and sensory integration therapies to Medicare"; and (3) that the Company conducted a scheme to falsify documentation connected with licensure and staffing. The actions assert claims under the Securities Act of 1933 and the Securities Exchange Act of 1934.

On November 4, 2024, Hindenburg Research published a report based on its five-month investigation that included interviews with 18 former PACS employees, competitors, and an analysis of over 900 PACS facility cost reports.

The report alleged that PACS had engaged in fraudulent practices, including: (1) abusing a COVID-era waiver to classify low-acuity patients as high-acuity and inflate Medicare reimbursements; (2) billing for unnecessary or nonexistent treatments, including respiratory and sensory integration therapies; (3) falsifying staffing documentation to inflate star ratings and avoid penalties; and (4) "renting" licenses to deceive regulators by borrowing credentials from third parties and employing unlicensed administrators or assigning administrators to manage facilities beyond state-mandated limits.

On this news, the price of PACS common stock fell $11.93 per share, or 27.78%, from its closing price on November 1, 2024 to close at $31.01 per share on November 4, 2024.

On November 6, 2024, the Company announced that it would postpone its third-quarter earnings release and disclosed that 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, the price of PACS common stock fell $11.45 per share, or 38.76%, from its closing price on November 5, 2024 to close at $18.09 per share on November 6, 2024.

About Lieff Cabraser

Lieff Cabraser Heimann & Bernstein, LLP, with over 125 attorneys in offices in San Francisco, New York, Nashville, and Munich, Germany, is an internationally-recognized law firm committed to advancing the rights of investors and promoting corporate responsibility. Repeatedly recognized as a "Plaintiffs' Powerhouse" by Law360, Lieff Cabraser has litigated some of the most important civil cases in the United States, and has assisted clients in recovering over $129 billion in verdicts and settlements. For over 50 years, Lieff Cabraser has remained committed to ensuring access to justice for all.

Source/Contact

Sharon Lee
Lieff Cabraser Heimann & Bernstein, LLP
415 956-1000
slee@lchb.com

SOURCE: Lieff Cabraser Heimann & Bernstein, LLP

View the original press release on accesswire.com

FAQ

What is the deadline for the PACS Group (NYSE:PACS) securities class action lawsuit?

The deadline to apply as lead plaintiff in the PACS Group securities class action lawsuit is January 13, 2025.

How much did PACS Group (NYSE:PACS) stock fall after the Hindenburg Research report?

PACS Group stock fell $11.93 per share (27.78%) to $31.01 on November 4, 2024, following the Hindenburg Research report.

What period does the PACS Group (NYSE:PACS) class action lawsuit cover?

The class action lawsuit covers investors who purchased PACS stock between April 11, 2024, and November 5, 2024, including IPO and SPO participants.

What happened to PACS Group (NYSE:PACS) stock after announcing the federal investigation?

PACS Group stock fell $11.45 per share (38.76%) to $18.09 on November 6, 2024, after announcing the federal investigation and postponing Q3 earnings.