NEW YORK, March 25, 2019 (GLOBE NEWSWIRE) -- Attorney Advertising -- Bronstein, Gewirtz & Grossman, LLC announces investors that a class action lawsuit has been filed against Healthcare Services Group, Inc. (“Healthcare Services” or the “Company”) (NASDAQ: HCSG) and certain of its officers, on behalf of shareholders who purchased or otherwise acquired Healthcare Services securities during the period between April 11, 2017 and March 4, 2019, inclusive (the “Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: www.bgandg.com/hcsg.
This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
The Complaint alleges that Defendants made materially false and misleading statements and/or failed to disclose material adverse information. Specifically, the complaint alleges that defendants engaged in a scheme to deceive the market and a course of conduct that artificially inflated the price of Healthcare Services securities and operated as a fraud or deceit on Class Period purchasers of Healthcare Services securities by misrepresenting the value of the Company’s business and prospects by overstating its earnings and concealing the significant defects in its internal controls.
On March 4, 2019, in a Form 8-K filed with the Securities and Exchange Commission (“SEC”), the Company disclosed that it had received a letter in November 2017 from the SEC regarding an inquiry that the SEC was conducting into EPS calculation practices and requesting that the Company voluntarily provide certain information and documents relating to its EPS rounding and reporting practices. The March 4, 2019 Form 8-K further disclosed that the Company also had received a subpoena in March 2018 from the SEC in connection with these matters and that it had been providing information and documents to the SEC.
The March 4, 2019 Form 8-K also revealed to investors that, during the fourth quarter of 2018, the Company authorized its outside counsel to conduct an internal investigation, under the direction of the Company’s Audit Committee, into matters related to the SEC subpoena. The Form 8-K acknowledged that, as a result of these circumstances, the Company was unable to file its Annual Report on Form 10-K for the year ended December 31, 2018 on time.
Then, on March 4, 2019, Monocle published an article entitled ‘Strategic Rounding’ At Healthcare Services Group: A Subpoena From The SEC And An Internal Investigation (the “March 2019 Article”). The March 2019 Article referred back to a prior article published by Monocle in March 2017—the allegations of which Healthcare Services categorically denied following its publication—claiming, in pertinent part: “[I]t appeared that the company had been actively engaging FOR OVER A DECADE in aggressive accounting by fiddling with its revenues and/or expenses in order to ensure that its earnings per share rounded up to the nearest penny every quarter. This helped enable the company to meet or beat the consensus sell-side earnings expectation most quarters, which in turn helped the company achieve premium earnings multiple for the stock. Arguably, this allowed founder and Chairman Daniel McCartney to personally realize millions of dollars more for the stock that he sold to the public than he otherwise would have.”
Additionally, according to the March 2019 Article, Healthcare Services “dramatically amend[ed]” the way it managed its quarterly EPS following Monocle’s publication of the March 2017 Article, as well as after Monocle informed the Company, the Company’s sell-side analysts, and the SEC of its findings. The March 2019 article also noted how Healthcare Services’ EPS continued to climb dramatically in the wake of Monocle’s release of the 2017 article. Following these disclosures, the Company’s stock price fell $4.96 per share, or 13.14%, to close at $32.78 on March 4, 2019.
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint you can visit the firm’s site: www.bgandg.com/hcsg or you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in Healthcare Services you have until May 21, 2019 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff.
Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm’s expertise includes general corporate and commercial litigation, as well as securities arbitration. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact:
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Hurwitz
212-697-6484 | info@bgandg.com