HCA to settle shareholder class-action lawsuit for $215M

HCA Holdings has entered into a preliminary agreement to pay $215 million to settle allegations the hospital giant concealed negative financial information from investors before its $4.35 billion initial public offering in March 2011.

HCA had a $30 IPO price, and by October 2011, when the shareholder lawsuit was filed, HCA's share price had fallen below $19.

In their lawsuit, the shareholders claimed HCA concealed unfavorable trends in Medicare and Medicaid revenue. The shareholders further alleged HCA accounted improperly for a 2006 reorganization and a 2010 restructuring.

Although HCA opposed the request for class certification in the case by arguing investors had many opportunities to learn more about HCA before purchasing their shares, a judge disagreed and certified the class in September 2014.

HCA also announced in a Securities and Exchange Commission filing on Wednesday that it reached preliminary agreements to settle three shareholder derivative cases, each of which is also related to the company's 2011 IPO.

More articles on healthcare industry lawsuits:

457 hospitals to pay $250M for alleged overuse of implantable cardiac devices
Ex-COO hits shuttered Texas hospital with class-action lawsuit over mass layoffs
Owner of NY medical clinics pleads guilty to role in $55M fraud and money laundering scheme

 

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