AAC Holdings Inc (NYSE: AAC) Investor Securities Class Action Lawsuit 08/24/2015

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Company Name(s): 
AAC Holdings
Case Name: 
AAC Holdings Shareholder Class Action Lawsuit 08/24/2015
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NYSE: AAC
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
08/24/2015
Class Period Begin: 
10/02/2014
Class Period End: 
08/04/2015
Court of Filing: 
U.S. District Court for the Middle District of Tennessee
Deadline To File for Lead: 
10/23/2015
Date Settled: 
03/07/2018
Settlement Amount: 
$25,000,000
Deadline to Participate in Settlement: 
07/19/2018
Settlement Notice: 
Settlement Proof: 
Summary: 

June 11, 2018 - The court approved the settlement and entered the orders approving the plan of allocation, the motion for attorneys’ fees and expenses, and dismissing the action with prejudice.

March 7, 2018 - The court preliminarily approved the settlement.

February 16, 2018 - Parties filed a stipulation of settlement.

July 1, 2016 - The court denied defendants' motion to dismiss.

April 14, 2016 - Defendants filed a motion to dismiss.

February 29, 2016 - The lead plaintiffs filed an amended complaint.

December 30, 2015 - Lead plaintiffs and lead counsel were appointed.

October 26, 2015 - Cases were consolidated.

October 23, 2015 - Lead plaintiff motions were filed.

August 24, 2015 - An investor in shares of AAC Holdings Inc (NYSE: AAC) filed a lawsuit in the U.S. District Court for the Middle District of Tennessee over alleged violations of Federal Securities Laws by AAC Holdings Inc in connection with certain allegedly false and misleading statements made between October 2, 2014 and August 3, 2015.

According to the complaint the plaintiff alleges on behalf of purchasers of AAC Holdings Inc (NYSE: AAC) common shares between October 2, 2014 and August 3, 2015, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between October 2, 2014 and August 3, 2015 defendants made allegedly false and misleading statements and allegedly failed to disclose material information, including with respect to legal proceedings brought against subsidiaries of AAC Holdings Inc and several former and one current employees, including its President at the time, Jerrod N. Menz.

An article alleged that shares of AAC Holdings Inc, also known as American Addiction Centers, are likely to fall by at least 50%, as it inflated its revenues and margins by conducting medically unnecessary testing. The article claims that it revealed that AAC Holdings Inc subsidiaries are testing their clients 6-12x more frequently than necessary and are then running unnecessary confirmatory tests which are then billed to insurance companies. The article further stated that AAC Holdings Inc is already the subject of one lawsuit in New Jersey alleging fraudulent billing with respect to excessive urine testing and that while AAC Holdings Inc has exited New Jersey, the same practices are still going on in other states. Shares of AAC Holdings Inc (NYSE: AAC) declined to as low as $29.75 per share on March 3, 2015.

On August 4, 2015, news reports revealed that several AAC Holdings Inc employees have been named in a criminal indictment alleging murder charges for the death of a former AAC Holdings Inc patient. The employees allegedly named as defendants for the death of the former patient are the AAC Holdings Inc former president, Jerrod Menz, a former board member, a current employee and three former employees.

Shares of AAC Holdings Inc (NYSE: AAC) declined from $40.28 per share on July 30, 2015, to as low as $16.38 per share on August 4, 2015.