On May 31, 2017, the Hon. Beverly Reid O’Connell, United States District Court of the Central District of California, appointed the Kehoe Law Firm, P.C. as Co-Lead Counsel on behalf of a putative class of those who either purchased or otherwise acquired NantHealth (NASDAQ:NH) securities pursuant or traceable to the company’s initial public offering (“IPO”) on or about June 2, 2016 or purchased NantHealth stock on the open market between June 2, 2016 and March 3, 2017, both dates inclusive.
In making the appointment, Judge O’Connell noted that the firms appointed lead counsel have “. . . significant securities class action litigation experience and have achieved highly favorable settlements for plaintiffs in previous actions.”
As previously posted, the Kehoe Law Firm, P.C. announced the filing of a class action lawsuit on behalf of those who purchased or otherwise acquired NantHealth, Inc. securities pursuant or traceable to NantHealth’s IPO on or about June 2, 2016 or on the open market between June 2, 2016 and March 3, 2017, both dates inclusive (the “Class Period”).
According to NantHealth, it is a transformational healthcare cloud-based IT company that purports to provide cloud-based platform solutions that converge science and technology through integrated clinical platform to provide actionable health information at the point of care for critical illnesses.
In September 2014, NantHealth’s founder and CEO, Patrick Soon-Shiong, announced a $12 million donation to the University of Utah in connection with an initiative to find genetic clues for the cause of diseases, including several cancers and amyotrophic lateral sclerosis.
On March 6, 2017, STAT, a news organization focused on medical industry reporting, published an article alleging that pursuant to the terms of Soon-Shiong’s donation to the University of Utah, the university was effectively required to spend $10 million on genetics analysis performed by NantHealth, an arrangement which enabled NantHealth to inflate by more than 50 percent the number of test orders it reported to investors in 2016. Also, the article quoted two tax experts stating that the deal “appeared to violate federal tax rules governing certain charitable donations” and “amount[ed] to indirect self-dealing by Soon-Shiong and his foundations.” A link to the article is available here.
Following this news, NantHealth’s share price fell $1.67, or 23.29%, to close at $5.50 on March 6, 2017.
The complaint alleges that throughout the Class Period, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) Soon-Shiong funneled business to NantHealth through his donation to the University of Utah, pursuant to the contractual terms of which the university was effectively required to spend $10 million on genetics analysis performed by the Company; (ii) consequently, the number of test orders that NantHealth reported to investors was artificially inflated; (iii) the contracts governing Soon-Shiong’s donation to the university violated federal tax law; and (iv) as a result, NantHealth’s public statements were materially false and misleading at all relevant times.
If you purchased NantHealth shares in or after the IPO, or are aware of any facts relating to this investigation, or you would like to learn more information about this investigation or pending class-action lawsuit, please complete the form to the right or contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], or send an e-mail to [email protected].
The Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.