Robbins LLP: Universal Health Services, Inc. (UHS) Misled Shareholders According to a Recently Filed Shareholder Derivative Lawsuit
Robbins LLP announces that a shareholder derivative lawsuit was filed on behalf of Universal Health Services, Inc. (NYSE: UHS) (“UHS”) in the Court of Common Pleas of Philadelphia County, Pennsylvania. The complaint is brought against certain officers and directors of the company for breaches of fiduciary duties, unjust enrichment, waste of corporate assets, abuse of control, and gross mismanagement from August 7, 2015 through the present. UHS, through its subsidiaries, owns and operates acute care hospitals, outpatient facilities, and behavioral healthcare facilities.
Universal Health Accused of Providing Poor Patient Care
According to the complaint, UHS officials misrepresented to investors the company’s admission and retention practices, the staffing level maintained and the training provided, the quality of patient care in its facilities, and the company’s financial performance. The complaint alleges that UHS officials mismanaged the company and its hospitals by: (1) causing UHS hospitals to adopt financially driven admission and retention practices that are not based upon the medical necessity of the patients; (2) systematically understaffing UHS hospitals and providing abysmal training to the hospitals’ staff, ignoring the huge risks thereby imposed on the patients; and (3) causing UHS and UHS hospitals to be subject to government investigations and regulatory penalties arising from potential False Claims Act violations, Stark Law violations, and noncompliance with conditions required for participation in the Medicare/Medicaid program. Meanwhile, UHS officials failed to correct the company’s misleading statements, causing UHS’s stock price to become artificially inflated, in turn enabling company insiders to engage in lucrative insider sales.
On December 7, 2016, BuzzFeed published a report detailing a year-long investigation into UHS, revealing that current and former UHS employees were “under pressure to fill beds by almost any method—which sometimes meant exaggerating people’s symptoms or twisting their words to make them seem suicidal—and to hold them until their insurance payments ran out.” The report specified that UHS hospitals “tried to keep beds filled even at the expense of the safety of their staff or the rights of the patients they were locking up.” On this news, UHS’s stock fell $15.01 per share, or nearly 12%, to close at $111.36 per share on December 7, 2016.
Universal Health Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Leonid Kandinov at (800) 350-6003, or you can complete the form below and we will contact you directly.