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 that PACS made false statements and failed to disclose its involvement in Medicare fraud schemes, including submitting false claims, billing unnecessary therapies, and falsifying documentation. Following a Hindenburg Research report on November 4, 2024, PACS stock fell 27.78% to $31.01. The stock dropped another 38.76% to $18.09 on November 6, 2024, after the company postponed Q3 earnings and disclosed federal investigation demands.

Positive

• None.

Negative

• Company faces securities class action lawsuit for alleged fraudulent practices
• Stock price fell 27.78% following Hindenburg Research report
• Additional 38.76% stock price drop after disclosure of federal investigation
• Q3 earnings release postponed due to ongoing investigation
• Alleged Medicare fraud scheme reportedly drove over 100% of operating and net income from 2020-2023
• Federal government issued civil investigative demands regarding reimbursement practices

Insights

Legal Expert

This class action lawsuit against PACS Group represents a significant legal and financial risk for the company. The allegations of Medicare fraud, including false claims and unnecessary treatments, are particularly serious given they allegedly accounted for over 100% of operating income from 2020-2023. The federal government's civil investigative demands further validate the gravity of these accusations.

The stock price decline of $23.38 (combined over two days), representing a total drop of 66.54%, indicates substantial market impact. The postponement of Q3 earnings and government investigation significantly increase litigation risk. The dual claims under both the Securities Act of 1933 and Exchange Act of 1934 expose PACS to potentially extensive liability, particularly given the allegations span both IPO and SPO registration statements.

Financial Analyst

The market reaction reflects severe concerns about PACS's business model and revenue integrity. The alleged Medicare fraud scheme, if proven, could result in substantial penalties, restitution payments and permanent damage to the company's revenue structure. The timing is particularly problematic as it affects both recent public offerings, potentially triggering significant investor losses and refund obligations.

The stock's dramatic decline from $42.94 to $18.09 has erased approximately $2.5 billion in market value. The postponement of earnings release suggests potential material restatements or internal control issues. Long-term implications include increased regulatory scrutiny, higher compliance costs and possible loss of Medicare certification, which could fundamentally threaten the company's business model.

SAN FRANCISCO--(BUSINESS WIRE)-- 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, 2024 secondary 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: https://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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241204015963/en/

Sharon Lee

Lieff Cabraser Heimann & Bernstein, LLP

415 956-1000

slee@lchb.com

Source: Lieff Cabraser Heimann & Bernstein, LLP

FAQ

What is the deadline for the PACS Group (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 stock drop after the Hindenburg Research report?

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

What period does the PACS Group class action lawsuit cover?

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

What were the main allegations in the Hindenburg Research report about PACS?

The report alleged that PACS engaged in Medicare fraud by misclassifying patients, billing unnecessary treatments, falsifying staffing documentation, and improperly using licenses to deceive regulators.