#United States #New York #Class Action #PACS Group #Pomerantz

Class Action Lawsuit Filed Against PACS Group, Inc.

Pomerantz LLP has recently announced a class action lawsuit against PACS Group, Inc. (NYSE: PACS), bringing attention to allegations of serious misconduct involving the company's financial practices. This legal action is aimed at shareholders who experienced losses in their investments and seeks to hold the company accountable for what appears to be deceptive practices that have significantly impacted stock valuation.

Allegations of Fraud

The class action lawsuit stems from a report released by Hindenburg Research on November 4, 2024. The report accused PACS Group of abusing a COVID-era waiver that allowed it to falsely submit Medicare claims. This scheme allegedly generated more than 100% of PACS' operating and net income from 2020 to 2023, thus creating an illusion of legitimate growth and profitability leading to its initial public offering (IPO) in early 2024.

Key highlights of the allegations include:

• - False Medicare Billing: The company is alleged to have billed Medicare for unnecessary therapies regardless of actual patient needs, contributing to inflated revenue figures.
• - Falsified Documentation: The report claims PACS engaged in falsifying documentation related to employee licensure, allegedly listing unqualified aides as certified staff in an effort to meet staffing ratios and avoid penalties.
• - Improper Use of Waivers: The company is accused of exploiting regulatory waivers in ways that contravened intended guidelines, ultimately eroding trust with stakeholders and regulators alike.

Following the claims presented in the report, PACS Group's stock saw a drastic decline. After the announcement, shares plummeted by 27.78%, closing at $31.01 per share. Shortly after, the company’s decision to postpone its fiscal Q3 earnings release further sent the stock down by nearly 39%, closing at $18.09 per share. This sharp decline has raised serious concerns among investors about the company's financial integrity and future performance.

Impact on Shareholders

The implications of such allegations are significant. Shareholders who purchased PACS securities during the alleged class period are strongly advised to take action. The law firm encourages investors to reach out if they wish to join the class action, with a deadline to apply as Lead Plaintiff of January 13, 2024. For further inquiries, investors can contact Pomerantz LLP directly, providing their relevant purchasing details to facilitate the process.

Pomerantz LLP's Role

Pomerantz LLP is recognized in the field of corporate law, particularly in handling securities class actions. Founded by Abraham L. Pomerantz, the firm has spent over 85 years advocating for victims of securities fraud and breaches of fiduciary duty. The significance of this current case against PACS Group falls in line with their ongoing efforts to ensure accountability in corporate governance and protect the rights of shareholders.

The firm’s well-established reputation suggests that they will pursue all available legal avenues to seek restitution for affected shareholders, particularly as the allegations continue to cast a shadow over PACS Group's operational legitimacy.

As this story develops, impacted shareholders should remain vigilant and informed, exploring their options legal representation and potential claims in the wake of this critical event.