Community Health Systems, Inc. (CYH) Accused of Misleading Shareholders
According to the derivative complaint, Community Health’s directors breached their fiduciary duty by misleading investors through a series of SEC reports that over-recorded net revenue and artificially inflated Community Health’s stock. On January 1, 2018, Community Health adopted a new accounting standards update (“ASU”) that altered the way Community Health recognized revenue, prompting the company to reexamine its previous financial statements. Following the review, Community Health issued a press release on February 27, 2018, revealing that it would be expecting a drop in net revenue for the final quarter and fiscal year 2017 due to previously under-reported provisions for bad accounts and contractual adjustments. On this news, Community Health’s stock fell over 17%, to close at $5.12. Today the stock trades at $2.24 and Community Health, its chairman, and its CEO have been named defendants in a securities class action lawsuit, potentially causing further harm to investors.
Community Health Systems, Inc. (CYH) Shareholders Have Legal Options
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