Quality Systems Must Face Lawsuit Accusing Management of Insider Trading and Defrauding Investors
According to a filed securities class action complaint, Quality Systems (QSII) flaunted substantial sales growth and an increase in projected revenue up until July 23, 2012, despite knowing as early as April 2011 that sales and sales prospects were sharply declining. While Quality Systems’ stock was trading high as the result of the company’s misstatements, on February 24, 2012, Quality Systems’ Chief Executive Officer liquidated nearly 90% of his holdings for nearly $4 million after the company’s stock price had increased over 45%. On July 26, 2012, Quality Systems retracted its guidance for fiscal year 2013 and announced its decline in net income and earnings per share. On this news, Quality Systems’ stock fell over 32% to close at $15.95 per share on July 26, 2012. Five and a half years later, Quality Systems’ stock trades even lower, closing at $14.03 per share on December 18, 2017.