On March 1, 2024, the Honorable Lindsay C. Jenkins of the U.S. District Court for the Northern District of Illinois appointed Berman Tabacco as sole Lead Counsel in the securities class action lawsuit against Veradigm Inc. (the “Company”) and certain of its executive officers. Judge Jenkins appointed the firm’s client, Alameda County Employees’ Retirement Association (“ACERA”), as sole Lead Plaintiff. The initial complaint alleges causes of action on behalf of all persons who acquired the common stock of Veradigm during the period from February 26, 2021 through December 7, 2023 (the “Class Period”).
Veradigm is a healthcare technology company that offers electronic health records, financial management, population health management, and consumer solutions to hundreds of thousands of healthcare providers.
The current operative complaint alleges materially false and misleading statements during the Class Period regarding Veradigm’s financial results and internal controls, which were claimed to have been prepared in compliance with Generally Accepted Accounting Principles (“GAAP”). Specifically, that complaint alleges:
- On February 28, 2023, Veradigm announced that, in conjunction with its year-end audit procedures, the Company had “detected certain internal control failures related to revenue recognition that had occurred over the prior six quarters, resulting in a misstatement of reported revenues during those periods.” As a result, the Company estimated that its revenue had been overstated by approximately $20 million from the third quarter of 2021 until the fourth quarter of 2022.
- In a March 22, 2023 press release, Veradigm announced that it had determined that the size and scope of the revenue misstatements were significantly greater than initially estimated and that each of its quarterly filings from fiscal 2021 and fiscal 2022 could no longer be relied upon and would need to be restated.
- In the months that followed, Veradigm further announced that it had identified additional misstatements dating back to fiscal year 2020, that it was no longer in compliance with the NASDAQ’s listing requirements, and that it expected to receive a delisting notice from the NASDAQ due to its inability to file its belated periodic SEC filings.
- On December 8, 2023, the Company announced that its Chief Executive Officer and Chief Financial Officer had been forced to resign as a result of the investigation by the Audit Committee of the Company’s Board of Directors into the accounting proprieties that form the subject of this case.
On February 29, 2024, Veradigm was delisted by NASDAQ after failing to cure identified issues by that NASDAQ-imposed deadline.
The Company has neither restated the identified financial statements nor filed any other financial statements since its initial announcement in early 2023.
The case is Erwin v. Veradigm Inc., Case No. 1:23-cv-16205 (N.D. Ill.). The litigation team includes Nicole Lavallee, Daniel Barenbaum, and Jeffrey V. Rocha from the firm’s San Francisco office.