Friday, February 3, 2012
Labaton Sucharow LLP Files Class Action Lawsuit on Behalf of Investors in Health Management Associates, Inc.
NEW YORK (February 3, 2012) — Labaton Sucharow LLP filed a class action lawsuit on February 2, 2012 in the U.S. District Court for the Middle District of Florida. The lawsuit was filed on behalf of purchasers of Health Management Associates, Inc. ("HMA" or the "Company") common stock between July 27, 2009 and January 9, 2012, inclusive (the "Class Period"). The action charges HMA and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Complaint alleges that, throughout the Class Period, the Company's financial results were artificially inflated by virtue of the fact that HMA was systematically overcharging Medicare, one of its principal sources of revenue.
HMA, through its subsidiaries, owns and operates hospital and other health service facilities. The Complaint alleges that Defendants asserted that HMA's positive financial results and increased hospital admissions were due to emergency room operational improvements, physician recruitment, and market service development, and failed to disclose that a material portion of the Company's revenue was derived from reimbursements improperly obtained from the Medicare Program for hospital admissions.
The truth about HMA's business practices began to be revealed on August 3, 2011, when HMA disclosed in its quarterly report for the second quarter of 2011 that it had received subpoenas from the U.S. Department of Health and Human Services, Office of Inspector General. In reaction to this news, HMA's share price fell by $0.80 per share, or 9.1 percent, to close at $7.97 per share on August 4, 2011 on high trading volume.
On October 19, 2011, Paul Meyer ("Meyer"), a retired officer of the Federal Bureau of Investigation who specialized in healthcare fraud and a former Director of Compliance at HMA, filed a whistleblower suit against HMA pursuant to Florida's Private Sector Whistle Blower's Act. Therein, Meyer alleged that he was fired in retaliation for uncovering, reporting, and demanding that HMA rectify systemic Medicare billing fraud at four HMA-owned and -operated facilities.
On January 9, 2012, equity analyst Sheryl Skolnick of CRT Capital Group LLC discussed Meyer's lawsuit and allegations in a note to investors. As a result of these revelations, HMA's stock price declined more than seven percent from its Friday, January 6 close of $7.49 per share, to close on Monday, January 9 at $6.96 per share on above-average trading volume.
The following day, January 10, 2012, the Company disclosed that on January 5, 2012, Timothy R. Parry, Senior Vice President, General Counsel, and Secretary of the Company, had abruptly announced his intention to immediately resign from the Company. As a result of this news, HMA's stock price declined an additional 13.07 percent in a highly volatile trading session, closing Tuesday, January 10, at $6.05 per share on extraordinarily high trading volume. If you are a member of this Class you can view a copy of the complaint and join this class action online at http://www.labaton.com/en/cases/Health-Management-Associates.cfm.
If you purchased HMA common stock during the Class Period, you may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the U.S. District Court for the Middle District of Florida no later than March 26, 2012. A lead plaintiff is a court-appointed representative for absent Class members. You do not need to seek appointment as lead plaintiff to share in any Class recovery in this action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in this action. If you would like to consider serving as lead plaintiff or have any questions about the lawsuit, you may contact one of our representatives, David C. Erroll, Esq. of Labaton Sucharow LLP, at (888) 753-2796 or (212) 907-0739, or via email at firstname.lastname@example.org.