NEW YORK, March 08, 2017 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against NantHealth, Inc. (“NantHealth” or the “Company”) (Nasdaq:NH) in the United States District Court for the Central District of California on behalf of a class consisting of investors who purchased or otherwise acquired NantHealth securities: (1) pursuant and/or traceable to NantHealth’s false and misleading Registration Statement and Prospectus, issued in connection with the Company’s initial public offering on or about June 2, 2016 (the “IPO” or the “Offering”); and/or (2) on the open market between June 2, 2016 and March 3, 2017, both dates inclusive (the “Class Period”), seeking to recover damages caused by defendants’ violations of the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”).
The Complaint alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Defendant Soon-Shiong funneled business to NantHealth through his donation to the University of Utah, pursuant to the contractual terms of which the university was effectively required to spend $10 million on genetics analysis performed by the Company; (ii) consequently, the number of test orders that NantHealth reported to investors was artificially inflated; (iii) the contracts governing Soon-Shiong’s donation to the university violated federal tax law; and (iv) as a result, NantHealth’s public statements were materially false and misleading at all relevant times.
On March 6, 2017, STAT, a news organization focused on medical industry reporting, published an article alleging that pursuant to the terms of Soon-Shiong’s donation to the University of Utah, the university was effectively required to spend $10 million on genetics analysis performed by NantHealth, an arrangement which enabled NantHealth to inflate by more than 50 percent the number of test orders it reported to investors in 2016. In addition, the article quoted two tax experts stating that the deal “appeared to violate federal tax rules governing certain charitable donations” and “amount[ed] to indirect self-dealing by Soon-Shiong and his foundations.” On this news, NantHealth’s share price fell $1.67, or 23.29%, to close at $5.50 on March 6, 2017.
If you wish to serve as lead plaintiff, you must move the Court no later than May 8, 2017. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
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