PACS Group, Inc. (PACS) Securities Class Action

The complaint alleges that, in the IPO offering documents and throughout the Class Period, PACS and additional defendants made false and misleading statements and failed to disclose that PACS engaged in schemes to: (1) submit false Medicare claims; (2) bill thousands of unnecessary respiratory and sensory integration therapies to Medicare; and (3) falsify documentation related to licensure and staffing.

The lawsuit follows Hindenburg’s Nov. 4, 2024 report, which was the product of an investigation that spanned five months and involved interviews with numerous former employees and competitors, concluded that PACS’s business model relies heavily on exploiting taxpayer-funded healthcare programs. The famed analyst alleges that the company:  

• Abused a COVID-era waiver to inappropriately access Medicare benefits for thousands of patients.
• Falsified patient records to inflate revenue and earnings.
• Engaged in fraudulent licensing practices to circumvent regulatory oversight.

On the news of the Hindenburg report, the price of PACS Group shares plunged $11.93, or over 27% lower.

Then, on Nov. 6, 2024, PACS revealed that it received civil investigative demands from the federal government “regarding the Company’s reimbursement and referral practices that may or may not relate to this week’s third-party report.” PACS also announced the postponement of its Q3 2024 financial results.

This news drove the price of PACS shares crashing $11.45, or over 38% lower, to close at $18.09 (well below the $21 IPO price).

In response to the allegations, law firm Hagens Berman has initiated an investigation into PACS Group’s business practices and disclosures. The firm is seeking to represent investors who may have suffered significant losses due to the company's alleged misconduct.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the PACS investigation about?

We are focused on whether PACS may have misled investors and regulators about its business practices and purported value-creation strategies.

WHAT SHOULD I DO?

I worked at PACS. What should I do?

If you were an employee of PACS, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in PACS, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any PACS investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.