Robbins Arroyo LLP: American Renal Associates Holdings, Inc. (ARA) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against American Renal Associates Holdings, Inc. (NYSE: ARA) in the U.S. District Court for the Southern District of New York. The complaint is brought on behalf of all purchasers of American Renal securities in connection with the company’s initial public offering (“IPO”) on April 21, 2016, and/or on the open market between April 21, 2016 and August 18, 2016, for alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 by American Renal’s officers and directors. American Renal operates as a dialysis services provider in the United States focused exclusively on joint venture partnerships with physicians.
American Renal Accused of Engaging in Health Insurance Fraud
According to the complaint, on April 20, 2016, American Renal filed its final prospectus with the U.S. Securities and Exchange Commission, stating, “We meet or exceed the core measures established by [the Centers for Medicare and Medicaid Services ("CMS")] to promote high-quality services in outpatient dialysis facilities.” The company further stated that it believed its strong performance was driven by a culture of compliance and that the company was in compliance with the relevant state false claims laws. On April 21, 2016, American Renal completed its IPO, issuing 8.625 million shares of common stock and raising net proceeds of approximately $189.75 million. However, the complaint alleges that American Renal officials failed to disclose that: (i) American Renal was engaged in a fraudulent scheme to steer patients away from qualified-for Medicare and Medicaid plans into more expensive Affordable Care Act plans (“ACA”) to obtain greater reimbursement for the company’s dialysis services; (ii) the foregoing scheme was in violation of federal and state laws; and (iii) as a result, American Renal’s public statements were misleading.
On July 1, 2016, three insurance companies filed a lawsuit against American Renal alleging violations of Florida’s Deceptive and Unfair Trade Practices Act, as well as fraud, negligent misrepresentation, and civil conspiracy to obtain funds in violation of Florida’s Patient Brokering Act, Florida’s Anti-Kickback Statute, and Florida’s insurance fraud statute. On news of the lawsuit, American Renal’s stock fell almost 10% the next trading day. On August 18, 2016, CMS announced that it had sent warning letters to all dialysis centers that participate in the federal Medicare program and that it is weighing financial penalties on providers found to have directed people eligible for Medicare into ACA plans instead. On this news, American Renal stock fell an additional 10.44%, or $2.31 per share, to close at $19.81 per share on August 19, 2016.
American Renal Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
Send This Post