Attention Merge Healthcare, Incorporated Investors: Merge Healthcare Misled Investors According to a Recently Filed Class Action
Robbins Arroyo LLP announces that an investor of Merge Healthcare, Incorporated (NASDAQ: MRGE) has filed a federal securities fraud class action complaint in the U.S. District Court for the Northern District of Illinois, Eastern Division. The complaint alleges that the company and certain of its officers and directors violated the Securities and Exchange Act of 1934 between August 1, 2012 and January 7, 2014 (the “Class Period”). Merge Healthcare offers health stations, clinical trial software, and other health data and analytics services designed to engage consumers in their personal health.
Merge Healthcare Is Accused of Misstating Financial Status Results
According to the complaint, shares of Merge Healthcare fell more than $2, or more than 45% to close at $2.43 on August 9, 2013, following the release of Merge Healthcare’s second quarter 2013 financial results, in which the company disclosed a 9% decline year-over-year in revenue, despite previously reporting an 82% increase in subscription backlog from the second quarter of 2012. Then, on January 8, 2014, Merge Healthcare announced that the existence and/or value of millions of dollars of customer contracts had been falsified for six quarters, ending September 30, 2013 by a rogue employee in an attempt to reach sales quotas and earn extra commission. On this news Merge Healthcare shares which traded as high as $4.71 per share during the class period, fell an additional 8%, to close at $2.31 on January 8, 2014.
The complaint also alleges that Merge Healthcare issued materially false and misleading statements regarding the company’s financial performance and prospects. Specifically, Merge Healthcare failed to disclose that: (i) the company was experiencing a continued reluctance amongst large heath systems to move forward with enterprise purchase; (ii) it lacked effective internal controls causing the company to improperly log and verify customer contracts and calculate commissions and; (iii) the company had ineffective disclosure controls that were not designed to provide reasonable assurance regarding the reliability of financial reporting.
Merge Healthcare Shareholders Are Encouraged to Contact Shareholder Rights Law Firm Robbins Arroyo
If you invested in Merge Healthcare and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.