An AFAM investor filed a lawsuit on behalf of purchasers of Almost Family, Inc. common stock during the period between November 4, 2009 and June 30, 2010, over alleged violations of Federal Securities Laws by Almost Family. Meanwhile an investigation on behalf of current long term investors of Almost Family, Inc. (NASDAQ:AFAM) over possible breaches of fiduciary duty by certain member of the AMED board of directors was announced.
Almost Family, Inc, located in Louisville, KY, along with its subsidiaries, is a provider of home health services. According to the complaint filed in the United States District Court for the Western District of Kentucky the plaintiff alleges purchasers of Almost Family, Inc. common stock during the period between November 4, 2009 and June 30, 2010, that Almost Family and certain of its officers and directors violated the Securities Exchange Act of 1934 by issuing between November 4, 2009 and June 30, 2010, materially false and misleading statements regarding Almost Familys operations and its business and financial results and outlook. The lawsuit follows an article in the Wall Street Journal. On April 27, 2010, The Wall Street Journal reported that an analysis by the Wall Street Journal of Medicare payments to home health-care companies in recent years raised questions about whether some companies, including the sectors largest company Amedisys Inc., are taking advantage of the Medicare reimbursement system. The article also names Gentiva Health Services Inc. (Nasdaq: GTIV), LHC Group, Inc. (Nasdaq: LHCG), and Almost Family Inc. (Nasdaq: AFAM). The April 26, 2010 article further stated that [t]he results show that the number of in-home therapy visits tracks Medicare financial incentives. Then, on July 1, 2010, before the market opened, Almost Family announced that it had received a civil subpoena for documents and a notice of an investigation from the SEC. The subpoena seeks all documents relating to the Companys home health care services and operations, including reimbursements under the Medicare home health prospective payment system, since January 1, 2000. As a result of this negative news, so the lawsuit, Almost Familys common stock fell $3.88 per share or 11.11%, on July 1, 2010, on high volume. AFAM shares declined from $36 per share on June 30, 2010, to almost $29 per share on July 01, 2010. Shares of Almost Family, Inc. (AFAM) traded recently at $25.60 per share, down from its 52weekHigh of $44.12 per share and over $51 per share in 2008.