NEW YORK, Sept. 21, 2016 /PRNewswire/ -- Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in American Renal Associates Holdings, Inc. ("American Renal Associates" or the "Company") (NYSE: ARA) of the October 31, 2016 deadline to seek the role of lead plaintiff in a federal securities class action lawsuit filed against the Company and certain officers.
The lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of all those who purchased American Renal Associates securities: (1) pursuant and/or traceable to American Renal Associates' Initial Public Offering on or about April 21, 2016 (the "IPO"); and/or (2) from April 21, 2016 through August 18, 2016 (the "Class Period"). The case, Gelsleichter v. American Renal Associates Holdings, Inc. et al, No. 1:16-cv-06841 was filed on August 31, 2016, and has been assigned to Judge Lewis A. Kaplan.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failed to disclose that: (i) American Renal Associates was engaged in a fraudulent scheme to steer patients away from qualified-for Medicare and Medicaid plans into more expensive Affordable Care Act ("ACA") plans to obtain greater reimbursement for the Company's dialysis services; (ii) the scheme was in violation of federal and state laws; and (iii) as a result, American Renal's public statements were materially false and misleading at all relevant times.
Specifically, on July 1, 2016, three insurance companies filed a lawsuit against American Renal Associates alleging that the Company was engaged in a "fraudulent and illegal scheme" that involved persuading patients who qualified for Medicare or Medicaid coverage to enroll in commercial healthcare plans and then putting those patients in touch with an American Renal-patronized charity that would pay the patients' insurance premiums. As Medicaid and Medicare provide for only predetermined reimbursement rates for dialysis services, the suit alleges that American Renal Associates would thus receive much larger reimbursements from the ACA insurer than it would have from Medicare or Medicaid coverage.
On this news, the Company's stock price fell from $28.53 per share on July 1, 2016 to a closing price of $25.71 on July 5, 2016 —a $2.82 or a 9.88% drop.
In addition, on August 18, 2016, the Centers for Medicare and Medicaid Services (the"Agency") announced that it had sent warning letters to all dialysis centers that participate in the federal Medicare program. The Agency also stated that it is weighing financial penalties on providers found to have directed people eligible for Medicare into ACA plans instead—as American Renal is alleged to have done.
On this news, the Company's stock price fell from $22.12 per share on August 18, 2016 to a closing price of $19.81 on August 19, 2016—a $2.31 or a 10.44% drop.
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If you invested in American Renal Associates stock or options pursuant to the Company's IPO and/or between April 21, 2016 and August 18, 2016 and would like to discuss your legal rights, visit www.faruqilaw.com/ARA. You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to firstname.lastname@example.org. Faruqi & Faruqi, LLP also encourages anyone with information regarding American Renal Associates' conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class that is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
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