Teleradiology services provider NightHawk Radiology has been hit with a shareholder lawsuit.
The law firm Coughlin Stoia Geller Rudman & Robbins of New York City announced last week that it filed the lawsuit in U.S. District Court for the District of Idaho. The firm said the suit was filed on behalf of an institutional investor that bought NightHawk shares between April 10, 2007 and February 13, 2008.
The law firm charges that NightHawk violated securities laws by "making material misrepresentations" regarding the company's prospects. Specifically, the lawsuit charges that NightHawk failed to disclose:
- NightHawk was experiencing a delay in transitioning physician contracts from Radlinx Group, which NightHawk bought in 2007, to NightHawk's compensation structure, which would cause the company to pay Radlinx physicians more than previously expected
- Demand for the company's services was weakening
- The company was experiencing difficulty in obtaining reimbursement for its services
The lawsuit also noted that when NightHawk announced its 2007 financial results on February 13, 2008, the company's stock fell 11%.
Related Reading
NightHawk unveils new QA program, December 1, 2009
NightHawk reports flat Q3 revenues, November 9, 2009
NightHawk to buy Berger shares, August 14, 2009
NightHawk posts Q2 revenue growth, August 6, 2009
Berger leaves NightHawk, June 15, 2009
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