Class Action Lawsuit Filed Against PACS Group, Inc. Over Allegations of Fraudulent Practices

Class Action Against PACS Group, Inc.

New York, December 3, 2024 – Pomerantz LLP has officially filed a class action lawsuit against PACS Group, Inc., publicly traded on the NYSE under the ticker PACS. The lawsuit stems from allegations of securities fraud and dubious business conduct by the company.

Background of the Case

The lawsuit targets PACS's operations during a period wherein numerous investors have been led to question the legitimacy of the company's growth. Following the publication of a report by Hindenburg Research on November 4, 2024, PACS faced severe scrutiny. This report, based on a comprehensive investigation, revealed troubling practices within the company.

Hindenburg's probing revealed a potential scheme where PACS allegedly misrepresented its financial standing through fraudulent Medicare claims, thus inflating its operating and net income figures significantly from 2020 through 2023. This behavior allegedly enabled PACS to go public in early 2024 while masking true growth and profitability figures.

The claims unsurfaced by Hindenburg suggested that PACS knowingly submitted thousands of unnecessary therapy billings to Medicare, irrespective of actual medical necessity. The report also suggested that PACS engaged in deceptive practices concerning licensure and staffing, including the retrospective falsification of documentation regarding nursing hours and improperly listing uncertified aides as certified, thereby violating staffing regulations.

Impact on Stock Price

Following these revelations, PACS's stock experienced a dramatic decline. On the date of the Hindenburg report release, the share price plummeted by $11.93, marking a 27.78% decrease that saw PACS close at $31.01 per share. The fallout continued when, on November 6, 2024, the company announced it would delay its fiscal third-quarter earnings report, further disclosing it was under federal investigation concerning its reimbursement practices. This led to another sharp drop in stock price, which fell to $18.09, a staggering 38.76% decrease from previous values.

Steps for Investors

Pomerantz LLP urges affected shareholders—those who acquired PACS securities during the specified class period—to act before the deadline of January 13, 2024, to be considered for Lead Plaintiff status. Investors wishing to get involved or gather more information can reach out to attorney Danielle Peyton at [email protected] or call the firm's office at 646-581-9980.

Pomerantz's Role

Pomerantz LLP is a prominent entity in class action litigation, particularly in the realms of corporate and securities law. Founded over 85 years ago, the firm has a proven track record of securing billions in damages for clients facing corporate misconduct.

This case represents not just possible recovery for shareholders but highlights persistent issues of transparency and accountability in corporate practices. As the legal proceedings unfold, investors are encouraged to stay informed and engaged with developments that may impact their interests in PACS Group, Inc.

For those looking for additional legal recourse, the complete details of the lawsuit, including a copy of the official complaint, can be accessed at www.pomerantzlaw.com. In an environment where corporate accountability is critical, the spotlight on PACS Group serves as a reminder to all investors about the importance of due diligence and vigilance in the stock market.