PainCare Holdings, Inc. Securities Litigation

Beginning on March 21, 2006, eleven class actions alleging violations of federal securities laws by Defendants were filed in this Court. In an Order dated July 28, 2006, the Court consolidated all eleven cases (collectively, the "Action").

In the same Order, the Court also appointed the Employees' Retirement System of the Government of the Virgin Islands as Lead Plaintiff, approved Barrack Rodos & Bacine as Lead Counsel, and approved Williams, Schifino, Mangione & Steady, P.A. as Liaison Counsel.

On September 11, 2006, Lead Plaintiff filed a Consolidated Class Action Complaint ("Complaint") alleging violations of §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On October 20, 2006, Defendants moved to dismiss the Complaint. On November 13, 2006, Lead Plaintiff opposed Defendants' motion. By Order dated April 25, 2007, the Court granted Defendants' motion to dismiss.

On May 23, 2007, Lead Plaintiff filed and served an Amended Consolidated Class Action Complaint (the "Amended Complaint"). The Amended Complaint alleged, among other things, that Defendants issued material misstatements and statements which omitted to state material facts concerning PainCare's financial results, including misstatements and omissions about PainCare's accounting for the company's stock option plans, certain acquisitions, and certain derivative financial instruments issued in connection with private placement transactions.

Lead Plaintiff alleged that PainCare's reported financial results before and during the Class Period were not presented fairly and in accordance with generally accepted accounting principles. The Amended Complaint alleges that the investing public was unaware of PainCare's purported accounting improprieties until March 15, 2006, when the company announced that it was restating its financial results for the years 2000 through 2004, and for the first three quarters of 2005. Lead Plaintiff alleged that the restatement lowered net income by approximately $12.7 million for 2003; approximately $7.2 million for 2004; and approximately $16.3 million for the first three quarters of 2005. Defendants have denied doing anything wrong and deny that anyone lost any money because of the restatement.

Read More

Contact us for more information