Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against Chemed Corporation
January 12 2012 - 4:34PM
Business Wire
Robbins Geller Rudman & Dowd LLP (“Robbins Geller”)
(http://www.rgrdlaw.com/cases/chemed/) today announced that a class
action has been commenced on behalf of an institutional investor in
the United States District Court for the Southern District of Ohio
on behalf of purchasers of Chemed Corporation (“Chemed” or the
“Company”) (NYSE:CHE) common stock during the period between
February 15, 2010 and November 16, 2011 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court
no later than 60 days from today. If you wish to discuss this
action or have any questions concerning this notice or your rights
or interests, please contact plaintiff’s counsel, Samuel H. Rudman
or David A. Rosenfeld of Robbins Geller at 800/449-4900 or
619/231-1058, or via e-mail at djr@rgrdlaw.com. If you are a member
of this class, you can view a copy of the complaint as filed or
join this class action online at
http://www.rgrdlaw.com/cases/chemed/. 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.
The complaint charges Chemed and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
Chemed, through its subsidiaries, provides hospice care and repair
and cleaning services in the United States. The Company operates in
two segments: VITAS and Roto-Rooter.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements regarding the
Company’s business and prospects. Specifically, defendants
misrepresented and/or failed to disclose the following adverse
facts: (a) that the Company engaged in a scheme to fraudulently
bill Medicare for hospice services for patients who did not qualify
for hospice and fraudulently shifted the costs of those patients
from health maintenance organizations that covered those patients
prior to enrollment in hospice to the U.S. government; (b) that a
significant portion of the Company’s hospice enrollments, revenues
and earnings were the direct result of defendants’ scheme to enroll
ineligible patients in hospice and fraudulently bill Medicare for
hospice services; (c) that, in a complaint filed under seal, a
former VITAS manager had accused the Company of engaging in a
Company-wide scheme to enroll ineligible patients in hospice and
fraudulently bill Medicare; (d) that the Company failed to maintain
adequate internal controls and procedures with respect to hospice
enrollments and Medicare billings; (e) that the Company’s financial
results were materially overstated as a result of defendants’
fraudulent scheme to enroll ineligible patients in hospice; and (f)
that, as a result of the foregoing, defendants lacked a reasonable
basis for their positive statements about the Company and its
prospects.
On November 16, 2011, a Bloomberg article entitled
“Whistleblower Accuses Chemed Unit of Medicare HMO Conspiracy”
disclosed that a former VITAS manager had accused Chemed of
defrauding the federal government by conspiring with health
insurers to enroll Medicare patients who were not dying into
hospice. The article also discussed a U.S. Department of Justice
investigation into fraudulent conduct by VITAS. In response to
these announcements, shares of the Company’s stock fell $6.87 per
share, or 11%, to close at $50.65 per share on November 16,
2011.
Plaintiff seeks to recover damages on behalf of all purchasers
of Chemed common stock during the Class Period (the “Class”). The
plaintiff is represented by Robbins Geller, which has expertise in
prosecuting investor class actions and extensive experience in
actions involving financial fraud.
Robbins Geller, a 180-lawyer firm with offices in San Diego, San
Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and
Atlanta, is active in major litigations pending in federal and
state courts throughout the United States and has taken a leading
role in many important actions on behalf of defrauded investors,
consumers, and companies, as well as victims of human rights
violations. The Robbins Geller Web site (http://www.rgrdlaw.com)
has more information about the firm.
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