The Law Office of Jeffrey M. Haber Announces the Investigation of American Renal Associates Holdings, Inc. and Certain of its Officers
- Posted on: Sep 21 2016
New York, N.Y. – September 21, 2016 – The Law Office of Jeffrey M. Haber (the “Firm”) is investigating American Renal Associates Holdings, Inc. (“ARA” or the “Company”) (NYSE: ARA) and certain of its officers for violations of the federal securities laws. A class action lawsuit has been brought in the United States District Court for the Southern District of New York on behalf of investors who (a) purchased or otherwise acquired the Company’s securities between April 20, 2016 and August 18, 2016, inclusive (the “Class Period”), and/or (b) purchased the Company’s common stock pursuant or traceable to the Registration Statement and Prospectus issued by the Company in connection with its initial public offering (“IPO”) on or about April 21, 2016. The complaint charges American Renal and certain of its officers (the “Defendants”) with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934.
American Renal is a Massachusetts-based provider of outpatient dialysis services that owns approximately 200 dialysis clinics throughout the country for patients suffering from chronic kidney failure or end stage renal disease.
On April 21, 2016, American Renal issued 8.625 million shares of common stock at $23 per share in connection with its IPO, raising net proceeds of approximately $189.75 million. The complaint alleges that Defendants made false and misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations and prospects, including that American Renal was engaged in a fraudulent scheme to steer patients away from Medicare and Medicaid plans into more expensive Affordable Care Act (“ACA”) plans to obtain greater reimbursement for the Company’s dialysis services. In that connection, American Renal allegedly funded a third-party charitable organization, the American Kidney Fund (“AKA”), to pay private insurance premiums only for treatments that would benefit the Company, and predominantly in locations without “in network” dialysis centers, so that American Renal would be paid “out-of-network” rates. Nevertheless, the Defendants falsely represented in the Registration Statement and Prospectus that American Renal “adhere[d] to stringent billing, reimbursement, and compliance procedures,” and that patients “opt[ed] for” ACA products, despite illicitly steering patients to those same services. Similar statements and omissions were made during the Class Period.
As a result of the Defendants’ false statements and/or omissions, the price of American Renal stock traded at artificially inflated prices during the Class Period, trading at a high of over $29 per share.
On July 2, 2016, three affiliates of UnitedHealth Group (“UnitedHealth”) filed a lawsuit against American Renal and an affiliated entity in the United States District Court for the Southern District of Florida alleging that American Renal was engaged in a “fraudulent and illegal scheme” that violated various state anti-kickback and insurance fraud statutes. According to the lawsuit, American Renal put patients who qualified for Medicare or Medicaid coverage in touch with AKA and persuaded them to enroll in UnitedHealth plans. AKA would pay the patients’ insurance premiums in full or in part. As Medicaid and Medicare provide for only predetermined reimbursement rates for dialysis services, the suit alleges that American Renal received much larger reimbursements from UnitedHealth as a commercial payor than it did from Medicare or Medicaid. On news of the lawsuit, the price of American Renal stock fell $2.82 per share, or nearly 10%, to close at $25.71 per share on July 5, 2016, the next trading day, on heavy volume.
On August 18, 2016, the Centers for Medicare and Medicaid Services announced that it had sent warning letters to all dialysis centers that participate in the Medicare program and that it was weighing financial penalties for providers found to have directed people eligible for Medicare into ACA plans instead, as American Renal was alleged to have done. On this news, the price of American Renal shares fell $2.31 per share, or more than 10%, to close at $19.81 per share on August 19, 2016, on extremely heavy volume.
If you purchased or otherwise acquired American Renal securities during the Class Period and/or purchased American Renal stock pursuant or traceable to the IPO, and would like to learn more about this lawsuit and your ability to participate as a lead plaintiff, without cost or obligation to you, contact The Law Office of Jeffrey M. Haber at (212) 209-1005, or firstname.lastname@example.org. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. Your share of any recovery in the action will not be affected by your decision of whether to seek appointment as lead plaintiff.
If you want to move for appointment as lead plaintiff, you must do so by no later than October 31, 2016.
No class has been certified in the action. Until a class is certified, you are not considered represented by an attorney. You may retain the Firm, or other attorneys, as your counsel in the action, or you may also choose to do nothing and be an absent class member.
The Firm also encourages anyone, including former employees, shareholders and others, with non-public information regarding the Company’s Class Period conduct to contact the Firm about helping in the investigation or taking advantage of the SEC Whistleblower Program. Under the SEC Whistleblower program, whistleblowers who provide original information may receive an award of up to 30% of any successful recovery made by the SEC.
About the Firm:
The Law Office of Jeffrey M. Haber is dedicated to representing corporations, small businesses, partnerships and individuals involved in a broad range of complex business and commercial litigation matters and violations of the securities laws. The firm combines the sophistication and counsel of a large national law firm with the economy, flexibility, commitment and personal attention of a small firm.
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