Wolf Popper LLP is pleased to report that the Fifth Circuit Court of Appeals on October 2, 2014 resurrected a securities fraud class action accusing home health care provider Amedisys Inc. of defrauding investors by hiding a Medicare fraud scheme. Case No. 13-30580. Wolf Popper LLP and co-counsel represented the lead plaintiffs on the appeal.
The three-judge panel criticized the district court for reviewing each alleged partial disclosure of Amedisys’ conduct alone then concluding that none of them were sufficient to constitute a corrective disclosure for a loss causation claim.
“This holding can best be understood by simply observing that the whole is greater than the sum of its parts,” the panel said in its decision. “The district court erred in imposing an overly rigid rule that government investigations can never constitute a corrective disclosure in the absence of a discovery of actual fraud.
Lead plaintiffs, the Public Employees’ Retirement System of Mississippi and the Puerto Rico Teachers Retirement System, accused Amedisys and several executives of improperly inflating Medicare reimbursements by pressuring and intimidating nurses and therapists to provide unnecessary treatment to trigger higher fees.
Lead plaintiffs alleged that while committing the alleged Medicare fraud, Amedisys made several false and misleading statements that artificially inflated the price of the company’s stock.
The case was remanded to and will continue in the district court. M.D. La., Civil Action No. 10-00395. The action is being prosecuted on behalf of all persons and entities who purchased or otherwise acquired the publicly traded securities of Amedisys from August 2, 2005 through and including September 28, 2010, and were damaged thereby.