Berman Tabacco has prevailed over a motion to dismiss securities fraud claims against Healthcare Services Group, Inc. (“HCSG”) and several of its executive officers. Berman Tabacco is Lead Counsel representing a state public pension fund in this securities fraud class action lawsuit brought on behalf of all persons who acquired HSCG common stock during the period between April 8, 2014 and March 4, 2019.
HCSG is one of the largest providers of housekeeping and laundry services to hospitals and other healthcare service organizations. The action alleges that, during the class period, defendants issued materially false and misleading statements and failed to disclose “earnings management” practices that allowed HCSG to consistently meet or beat earnings per share estimates, which, in turn, caused the price of the company’s stock to be artificially inflated. In addition, the action alleges that HCSG and defendants failed to disclose the existence of an ongoing SEC investigation.
On April 24, 2020, Judge Eduardo C. Robreno of the United States District Court for the Eastern District of Pennsylvania issued an Order that denied Defendants’ Motion to Dismiss. The Court found that Lead Plaintiff’s “Amended Complaint sufficiently plead[] facts which satisfy the elements of a [Securities Exchange Act] section 10(b) violation, and the control necessary for a section 20(a) violation.”
Boston Partner Patrick T. Egan, stated, “We are encouraged by the Court’s ruling and look forward to litigating this case on behalf of our client and the proposed class.”
The case is Koch v. Healthcare Services Group, Inc., et al., No. 2:19-CV-01227-ER (E.D. Pa.). The litigation team includes Patrick T. Egan and Steven J. Buttacavoli from Berman Tabacco’s Boston office and Nicole Lavallee and Victor S. Elias from the firm’s San Francisco office.