Oct. 9, 2009 (Business Wire) -- Law Offices of Howard G. Smith announces a November 20, 2009, deadline to move to be a lead plaintiff in the securities class action lawsuit filed on behalf of all persons or entities who purchased or otherwise acquired the common stock of Psychiatric Solutions, Inc. (“Psychiatric Solutions” or the “Company”)(Nasdaq:PSYS) between February 21, 2008 and February 25, 2009, inclusive (the “Class Period”). The shareholder lawsuit is pending in the United States District Court for the Middle District of Tennessee.
The Complaint charges Psychiatric Solutions and certain of the Company’s executive officers with violations of federal securities laws. Psychiatric Solutions provides inpatient behavioral health care services for children, adolescents and adults in the United States. The Company provides its services – which include nursing observation and care, daily interventions and oversight by a psychiatrist, and coordinated treatment by physician-led mental health teams – through acute inpatient behavioral health care facilities and residential treatment centers. The Complaint alleges that during the Class Period, defendants issued materially false and misleading statements concerning the Company's safeguards and controls over its operations, and downplayed quality-of-care and patient safety incidents at its facilities, including at the Company-owned Riveredge Hospital ("Riveredge") – Illinois' largest psychiatric facility. Specifically, defendants failed to disclose or indicate, among other things, that: (a) the Company had, in violation of Generally Accepted Accounting Principles, failed to properly account for its contingent liabilities related to the deficiencies in its operations; (b) the Company misrepresented the patient safety of its operations; (c) the Company failed to maintain effective risk management controls over its operations, including controls to ensure the Company properly reported any incidents at its facilities to the proper authorities; and (d) as a result of ongoing patient-care and risk-management problems at its facilities, the Company had no reasonable basis to make projections about its 2008 or 2009 financial results.
On February 25, 2009, Psychiatric Solutions announced disappointing fourth-quarter and year-end financial results, and reduced its revenue guidance for 2009 due in large part to problems at Riveredge. As a result of this news, Psychiatric Solutions' stock plummeted $9.79 per share, or 35%, to close on February 26, 2009, at $17.50 per share, on extremely heavy volume of more than 17 million shares traded.
No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased or acquired Psychiatric Solutions common stock between February 21, 2008 and February 25, 2009, you have certain rights, and have until November 20, 2009, to move for lead plaintiff status. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, Toll-Free at (888) 638-4847, by email to howardsmith@howardsmithlaw.com or visit our website at http://www.howardsmithlaw.com.
