SAN DIEGO & FLINT, Mich.--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that a class action complaint was filed against Diplomat Pharmacy, Inc. (NYSE: DPLO) in the U.S. District Court for the Eastern District of Michigan. The complaint is brought on behalf of all purchasers of Diplomat securities between October 9, 2014 and November 2, 2016, for alleged violations of the Securities Exchange Act of 1934 by Diplomat's officers and directors. Diplomat operates as an independent specialty pharmacy in the United States.
View this information on the law firm's Shareholder Rights Blog: www.robbinsarroyo.com/shareholders-rights-blog/diplomat-pharmacy-inc
Diplomat Accused of Misrepresenting Its Financial Condition
According to the complaint, Diplomat's core revenues are driven by patient care to treat chronic conditions, and as a specialty pharmacy the company is liable for direct and indirect remuneration ("DIR fees") to government agencies, payors, and insurance companies. Throughout the class period, Diplomat highlighted the strong momentum in its business in filings with the U.S. Securities and Exchange Commission. Specifically, Diplomat stated, "We believe that we are well positioned to continue to gain share in the fast-growing specialty pharmacy marketplace, and the public market provides us tremendous financial flexibility to carry out our strategy." Diplomat also reported that hepatitis C patient care was a key driving force in its future growth and profitability, touted strong financial results, and predicted that the company would benefit from strong industry trends in the future.
However, the complaint alleges that Diplomat officials failed to disclose that: (1) the company lacked adequate internal controls over its financial reporting; (2) as a result, the company would not adequately calculate DIR fees; (3) the company's hepatitis C segment was not performing as previously disclosed to investors; and (4) therefore, the company had overstated its full-year 2016 guidance. On October 26, 2016, Diplomat announced the resignation of its Chief Financial Officer, which came just one week ahead of the company's announcement of its third quarter 2016 earnings. On November 2, 2016, Diplomat lowered its high end guidance for the full year 2016 from $4.9 billion to $4.6 billion, attributing the poor operating results to "softness in the hepatitis C business" and DIR fees. On this news, Diplomat's stock fell $9.43 per share, or over 42%, to close at $12.95 per share on November 3, 2016.
Diplomat Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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