Cohen Milstein Sellers & Toll PLLC Announces the Investigation of Merge Healthcare, Inc.
WASHINGTON--(BUSINESS WIRE)--Cohen Milstein Sellers & Toll PLLC is conducting an investigation to determine whether Merge Healthcare, Inc. (“Merge” or the “Company”) and certain of its officers and directors made false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
“recently learned through an internal review that a former sales employee in its eClinical business had falsified the existence or amount of certain customer contracts.”
A class action lawsuit was filed in the U.S. District Court for the Northern District of Illinois by another law firm on behalf of purchasers of the common stock of Merge Healthcare, Inc. (NASDAQ: MRGE) between August 1, 2012 and January 7, 2014, inclusive (the “Class Period”).
The complaint alleges that Merge and certain of its officers and directors (“Defendants”) misrepresented and/or failed to disclose that: (1) both the existence and value of millions of dollars of the Company’s eClinical customer contracts had been falsified; (2) as a result, the Company’s reported subscription backlog was overstated during the six quarters ended September 30, 2013; and (3) the Company was experiencing a continued reluctance amongst large health systems to move forward with enterprise imaging purchases.
The claims in this case arise from the Company’s January 8, 2014 announcement that the existence or value of millions of dollars-worth of contracts had been falsified over a period of six quarters ending September 30, 2013. Specifically, the Company reported that it “recently learned through an internal review that a former sales employee in its eClinical business had falsified the existence or amount of certain customer contracts.” Although Merge did not say that it would restate its previously issued financial statements, Merge did significantly reduce its previously-announced subscription backlog totals for its Merge DNA segment for the quarterly periods ended June 30, 2012 through September 30, 2013.
The Company provided the following additional details regarding the overstatement of DNA subscription backlog:
After initially identifying the issue, the company’s senior management conducted a preliminary internal investigation and reported its findings to the Audit Committee of the company’s Board of Directors. The Audit Committee then authorized an independent investigation by outside counsel, Jenner & Block LLP, and Alvarez & Marsal Global Forensic and Dispute Services, LLC, a forensic accounting firm. The independent investigation concluded that the former employee had falsified contracts with an apparent value of approximately $5.8 million and $9.4 million in 2012 and 2013, respectively…
The price of Merge shares fell from $2.52 to $2.31 on January 8, 2014.
Cohen Milstein encourages all investors who purchased Merge common stock between August 1, 2012 and January 7, 2014 or former employees with information concerning this matter to contact the firm.
If you are a Merge shareholder and would like to discuss your right to recover for your economic loss, you may, without any cost or obligation, call Cohen Milstein’s Managing Partner, Steven J. Toll at (888) 240-0775 or (202) 408-4600, or email him at firstname.lastname@example.org. If you wish to serve as lead plaintiff, you must move the Court no later than March 17, 2014 to request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. To be appointed lead plaintiff, the Court must decide that your claim is typical of the claims of other class members, and that you will adequately represent the class. Your share in any recovery will not be enhanced or diminished by the decision whether or not to serve as a lead plaintiff. Any member of the proposed class may retain Cohen Milstein Sellers & Toll PLLC or other attorneys to serve as your counsel in this action, or you may do nothing and remain an absent class member.
Cohen Milstein Sellers & Toll PLLC has significant experience in prosecuting investor class actions and actions involving securities fraud. The firm has offices in Washington, D.C., New York, Chicago, Philadelphia and Palm Beach Gardens, and is active in major litigation pending in federal and state courts throughout the nation.
The firm’s reputation for excellence has repeatedly been recognized by courts which have appointed the firm to lead positions in complex multi-district or consolidated litigation. Cohen Milstein Sellers & Toll PLLC has taken a lead role in numerous important cases on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total over one billion dollars. Prior results do not guarantee a similar outcome. For more information visit www.cohenmilstein.com.
If you have any questions about this notice or the action, or with regard to your rights, please contact either of the following:
Steven J. Toll, Esq.
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W.
West Tower, Suite 500
Washington, D.C. 20005
Telephone: (888) 240-0775 or (202) 408-4600
Email: email@example.com; firstname.lastname@example.org