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Chapin Fitzgerald Sullivan & Bottini LLP Files Class Action Suit Against HCA Holdings, Inc.
Chapin Fitzgerald Sullivan & Bottini LLP ("Chapin Fitzgerald") today announced that a class action has been commenced in the United States District Court for the Middle District of Tennessee on behalf of purchasers of HCA Holdings, Inc. ("HCA").
If you wish to serve as lead plaintiff, you must move the Court no later than December 27, 2011. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Frank Bottini of Chapin Fitzgerald at 800/675-0152 or 619/241-4810, or via e-mail at firstname.lastname@example.org. 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.cfsblaw.com. 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 HCA, certain of its officers and directors and the underwriters of its IPO with violations of the Securities Act of 1933. HCA operates acute care hospitals, outpatient facilities, clinics and other patient care delivery settings.
The complaint alleges that on or about March 11, 2011, HCA filed its Prospectus for the IPO, which forms part of the Registration Statement and which became effective on March 9, 2011. At least 145.1 million shares of HCA common stock were sold to the public at $30 per share, raising $4.4 billion in gross proceeds for the Company and the selling shareholders.
On July 25, 2011, HCA issued a press release announcing disappointing second quarter 2011 financial results. On this news, HCA's stock declined $6.64 per share to close at $27.97 per share on July 25, 2011, a one-day decline of nearly 20%. Then, on October 1, 2011, Barron's issued an article entitled "Where Did the $15.8 Billion Go?", which questioned HCA's accounting practices. According to the article, HCA improperly accounted for two major acquisitions as recapitalizations. In both instances, HCA should have accounted for the transaction as an acquisition using the purchase accounting method, but instead opted to use what is the functional equivalent of a pooling-of-interests method, which method was eliminated by the Financial Accounting Standards Board in 2001 in order to improve the quality of information provided to investors and users of financial statements. By using this prohibited method, HCA overstated its reported earnings, as the Company was able to avoid taking significant charges, including substantial depreciation and amortization charges, which would have negatively impacted its earnings. On this news, HCA's stock declined $1.35 per share to close at $18.81 per share on October 3, 2011, a one-day decline of nearly 7% and a nearly 38% decline from the stock's IPO price.
According to the complaint, the true facts which were omitted from the Registration Statement were as follows: (a) the Company improperly accounted for its prior business combinations in violation of Generally Accepted Accounting Principles, causing its financial results to be materially misstated; (b) the Company failed to maintain effective internal controls concerning its accounting for business combinations;
Plaintiff seeks to recover damages on behalf of all purchasers of HCA common stock issued in connection with its March 9, 2011 IPO (the "Class"). The plaintiff is represented by Chapin Fitzgerald, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. The Chapin Fitzgerald Web site (http://www.cfsblaw.com) has more information about the firm.
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The plaintiff is represented by Chapin Fitzgerald, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. The Chapin Fitzgerald Web site (http://www.cfsblaw.com)