Class-action suit accuses Nighthawk of Exchange Act violation

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A class-action suit was filed last week against teleradiology provider Nighthawk Radiology Holdings, accusing certain executives and officers of the company with failing to disclose facts about its financial condition, business and prospects.

The company's shareholders, who filed the suit, also alleged that the company failed to disclose:

  • That it was experiencing a delay in transitioning the Radlinx Group physician contracts to Nighthawk's compensation structure, which would cause the company to pay more compensation to Radlinx physicians than previously expected;
  • That demand for the company’s services was weakening;
  • That the company was experiencing difficulties in obtaining reimbursement for its services; and
  • As a result of the foregoing, Nighthawk lacked a reasonable basis for its positive statements about the company and its prospects.

The plaintiff, who is being represented by Coughlin Stoia, a 190-lawyer U.S. firm, is seeking to recover damages on behalf of all purchasers of the Nighthawk stock during the Class Period between April 10, 2007 to Feb. 13, 2008, under the Securities Exchange Act of 1934.