#USA #New York #PACS Group #Pomerantz LLP #Hindenburg Research

Pomerantz LLP Launches Class Action Against PACS Group

On November 25, 2024, Pomerantz LLP announced a significant development for investors in the healthcare sector. The law firm is filing a class action lawsuit against PACS Group, Inc. (NYSE: PACS), establishing a legal platform for shareholders who suspect misconduct within the company's operations.

Background of the Case

Pomerantz LLP, a highly regarded firm specializing in corporate and securities litigation, has a long history of fighting for the rights of investors. The class action stems from a report published by Hindenburg Research, following a comprehensive five-month investigation. This investigation included discussions with 18 former PACS employees and detailed analyses of over 900 facility cost reports associated with the company.

According to the report, PACS purportedly engaged in fraudulent practices related to Medicare claims, specifically utilizing a COVID-era waiver to submit false claims that significantly inflated the company's financial standing. This alleged scheme is said to have contributed to more than 100% of PACS' operating and net income from 2020 to 2023, creating an illusion of robust growth in the run-up to its initial public offering (IPO) in early 2024.

In addition to false Medicare claims, the report accused PACS of unethical billing practices, including charging for unnecessary therapies and services regardless of actual clinical needs. Furthermore, it alleged that the company misrepresented the qualifications of its staff, such as improperly listing uncertified nurse aides as certified, thereby manipulating staffing ratios to meet regulatory requirements.

The Impact on Shareholder Value

The ramifications of the Hindenburg report were immediate and significant. Following its release on November 4, 2024, PACS' stock price plummeted by $11.93 per share, marking a dramatic drop of 27.78%, and closing at $31.01. Just two days later, the situation escalated as PACS announced the postponement of its fiscal third quarter earnings release, disclosing that it was under investigation by the federal government concerning its reimbursement practices. The news further spooked investors, causing the stock price to decline to $18.09 per share, a staggering 38.76% decrease from its previous close.

Call to Action for Investors

Pomerantz LLP is inviting PACS shareholders who acquired securities during the alleged misconduct period to join the class action lawsuit. Investors have until January 13, 2024, to request that the court appoint them as Lead Plaintiff for the class. As part of the legal process, those interested in participating can obtain further details about the complaint by visiting the firm's website.

Legal Expertise Behind the Case

With a legacy spanning over 85 years, Pomerantz has established itself as a leader in tackling corporate and securities fraud. The firm specializes in holding companies accountable for breaches of fiduciary duties, securities fraud, and other forms of corporate misconduct.

As this case develops, it is crucial for stakeholders in PACS Group, as well as those observing from the sidelines, to stay informed about the proceedings and potential outcomes. The class action lawsuit represents not only an opportunity for compensation for those affected but also serves as a broader reminder of the importance of corporate accountability in the healthcare sector.

For more assistance or inquiries, investors can reach Danielle Peyton at Pomerantz LLP via email at [email protected] or by calling 646-581-9980, with toll-free options available for potential class members.