Company: American Renal Associates Holdings, Inc.
Class Period: August 10, 2016 — March 27, 2019
Court: U.S.D.C. - District of New Jersey
A shareholder class action lawsuit has been filed against American Renal Associates Holdings, Inc. (“American Renal”) on behalf of investors who purchased shares of the Company’s stock between August 10, 2016 and March 27, 2019, inclusive (the “Class Period”).
The complaint alleges that the defendants made false and misleading statements and/or failed to disclose material adverse information to investors during the Class Period concerning the accuracy and reliability of the Company’s financial statements. Specifically, the defendants failed to disclose or indicate that: (i) issues with American Renal’s accounting process for revenue recognition, collections, and related matters would give rise to an SEC investigation into the same, and increased regulatory scrutiny by the SEC; (ii) American Renal’s financial statements for the fiscal years 2014, 2015, 2016 and 2017 contained in its Annual Reports for the years ended December 31, 2016 and 2017, and its condensed consolidated financial statements in quarterly reports from 2016 through 2018 were false and could not be relied upon; and (iii) American Renal had material weaknesses in its internal control over financial reporting.
On March 8, 2019, American Renal disclosed that it was delaying the filing of its fiscal 2019 Annual Report, and that the Company’s Audit Committee was “examining reserve computations and other accounting practices that could have an impact on accounts receivable and revenue for the fiscal year ended December 31, 2018, as well as the previously reported fiscal years….” Following this news, shares of the Company’s stock declined $2.05 per share, or over 16% in value, to close on March 8, 2019 at $10.46 per share, on heavy trading volume.
Subsequently, on March 27, 2019, American Renal disclosed that the Company’s previously issued financial statements for fiscal years 2014 – 2017 “should be restated and should no longer be relied upon,” and that the Company’s Chief Financial Officer had “resigned” effective March 26, 2019. Following this additional news, shares of the Company’s stock declined an additional $3.69 per share, or 38% in value, to close on March 28, 2019 at $6.01 per share, again on heavy trading volume.
American Renal stockholders who purchased shares of the Company’s stock before March 27, 2019 are encouraged to contact Kaskela Law LLC at (888) 715 – 1740, or by completing the information form on this page, for additional information about this action and their legal rights and options.