New Federal Securities Cases
A class action lawsuit has been filed in the United States District Court for the District of Colorado against DaVita Inc. ("DaVita" or the "Company") (NYSE: DVA) on behalf of investors who purchased or otherwise acquired DaVita securities during the period from August 5, 2015 through October 21, 2016 (the "Class Period"). The lawsuit brings forth claims for violations of the Securities Exchange Act of 1934.
DaVita provides kidney dialysis services for patients suffering from chronic kidney failure or end-stage renal disease. The Company operates kidney dialysis centers and provides related lab services in outpatient dialysis centers, and provides acute inpatient dialysis services in approximately 900 hospitals and related laboratory services in the United States. During the Class Period, DaVita made contributions to a purported charitable foundation called the American Kidney Fund ("AKF"), a group that provides financial assistance toward patients' health insurance premiums.
According to the lawsuit, Defendants failed to disclose that: (1) the Company and its senior executives purposefully steered patients into unnecessary insurance plans in order to maximize profits; (2) the Company was using AKF as a vehicle to facilitate these improper practices; and (3) as a result, DaVita's revenues and profits were illegally obtained.
On August 18, 2016, The Centers for Medicare & Medicaid Services issued a public request for information regarding the alleged steering of Medicare and Medicaid beneficiaries into other plans in order to earn higher reimbursement rates. Following this news, the Company's stock price fell from $67.65 to $64.48 per share.
Then, on October 23, 2016, the St. Louis Post published an article entitled "DaVita encouraged some low-income patients to enroll in commercial plans" which directly accused DaVita of steering clients to private insurers and utilizing its own money to pay for health insurance premiums through the AKF. Following this news, shares of the Company's stock declined from $60.96 to $58.10 per share.
Subsequently, on January 6, 2017, The Wall Street Journal reported that investigators from the U.S. Department of Justice "are probing a controversial arrangement under which kidney-care companies support charitable efforts to help patients pay health-insurance premiums, according to disclosures from major dialysis providers." Additionally, the article reported that the "Boston U.S. attorney's office has subpoenaed DaVita Inc. ... seeking 'the production of information related to charitable premium assistance.'"
If you acquired Davita securities during the Class Period, you may, no later than April 3, 2017, request that the court appoint you lead plaintiff of the proposed class. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions that could affect the overall recovery for class members, including decisions concerning settlement.
If you are a current or former Devita shareholder and wish to obtain additional information, please fill out the contact form at the link below.
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