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Case Status:    ONGOING    
On or around 07/31/2015 (Ongoing date of last review)

Filing Date: February 02, 2006

According to an article dated November 15, 2007, on October 12, 2007, the district court found that the plaintiffs failed to link the allegations of fraud with a subsequent disclosure that caused the defendant's stock price to drop. Further, a securities fraud claim must contain allegations of scienter that are so particular that they give rise to a strong inference that the defendants acted with scienter. The district court found that the plaintiffs failed to plead scienter with particularity. The district court dismissed the plaintiffs' claims, finding that they failed to plead loss causation and scienter.

On January 16, 2007, plaintiffs filed an amended consolidated complaint, which defendants moved to dismiss on March 12, 2007.

As disclosed by the Company’s FORM 10-Q for the quarterly period ended September 30, 2006, on February 2 and February 13, 2006, respectively, two substantially similar putative class action lawsuits, entitled Indiana State Dist. Council of Laborers & HOD Carriers Pension & Welfare Fund v. Omnicare, Inc., et al., No. 2:06cv26 (“HOD Carriers”), and Chi v. Omnicare, Inc., et al., No. 2:06cv31 (“Chi”), were filed against Omnicare and two of its officers in the United States District Court for the Eastern District of Kentucky purporting to assert claims for violation of §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On April 3, 2006, Plaintiffs in the HOD Carriers case formally moved for consolidation and the appointment of lead plaintiff and lead counsel pursuant to the Private Securities Litigation Reform Act of 1995. On May 22, 2006, that motion was granted, the cases were consolidated, and a lead plaintiff and lead counsel were appointed. On July 20, 2006, plaintiffs filed a consolidated amended complaint, adding a third officer as a defendant and new factual allegations relating primarily to revenue recognition, the valuation of receivables and the valuation of inventories. On October 31, 2006, plaintiffs moved for leave to file a second amended complaint. The proposed second amended complaint, which purports to be brought on behalf of all purchasers of Omnicare common stock from August 3, 2005 through July 27, 2006, seeks to add two members of the Company’s Board of Directors as defendants and a new claim (asserted by a new proposed plaintiff) for violation of Section 11 of the Securities Act of 1933 based on alleged false and misleading statements in the registration statement filed in connection with the Company’s December 2005 public offering. In addition, the proposed second amended complaint would, among other things, add allegations that the Company failed to timely disclose its contractual dispute with United and failed to timely record certain special litigation reserves. Defendants’ response to plaintiffs’ motion for leave to amend is due on or before November 20, 2006.

The original complaint charges Omnicare and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Omnicare provides pharmaceutical care for elderly people primarily in the United States and Canada.

Specifically, the complaint alleges that during the Class Period, defendants made false and misleading statements regarding the Company’s business and prospects. As a result of these false statements, Omnicare stock traded at inflated levels during the Class Period, trading as high as $61.85 per share, and the Company was able to complete offerings of more than $2.5 billion worth of securities.

On January 30, 2006, Associated Press reported that on January 27, 2006, according to the Cincinnati Enquirer, the Michigan attorney general’s office raided Omnicare’s offices in Livonia and other cities. On this news, an analyst with Stifel Nicolaus downgraded the stock due to his concerns regarding the raid and the potential for further raids on the Company’s offices. In response, on January 30, 2006, Omnicare shares fell $5.09 to $49.96 in afternoon trading on the New York Stock Exchange.

According to the complaint, the true facts, which were known by each of the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company was artificially inflating its earnings by engaging in improper generic drug substitution; (b) the Company was not in compliance with Medicare laws; (c) the implementation of the Medicare Part D Plan had dramatically increased the Company’s costs and increased the number of rejected Medicare claims to nearly 40%; (d) the Company was not “well-positioned to add value under the new Medicare Part D” Plan, but rather, the Company lacked adequate staff and internal compliance controls to ensure the Company could benefit from the new plan and instead, the Part D Plan wreaked havoc on the Company’s business model, sending costs, rejection rates and receivables far higher than shareholders were led to believe.

On November 09, 2007, a notice of appeal was filed with the Sixth Circuit Court of Appeal regarding the District Court’s order of dismissal.

On October 21, 2009, a USCA Judgment was issued by the Sixth Circuit Court of Appeal that AFFIRMED IN PART, REVERSED IN PART, and REMANDED the case for further proceedings. Specifically the Judgment stated, the District Court's dismissal of the §10(b), §20(a) and Rule 10b-5 claims as well as the denial of Alaska Electrical's motion to intervene were AFFIRMED. The Court REVERSED the dismissal of the §11 claim and REMANDED the case to the District Court.

On February 4, 2011, the defendants filed a renewed motion to dismiss the plaintiff's claim for violation of 11 of The Securities Act of 1933. Judge William O. Bertelsman granted the defendants motion on July 14, 2011, but also granted the plaintiff's motion to file a second amended complaint, which they did on the same day.

On February 13, 2012, Judge William O. Bertelsman granted the defendants' motion to dismiss plaintiffs’ Third Amended Complaint.

On May 23, 2013, the United States Court of Appeals issued an Opinion and subsequent Judgment reversing the District Court's decision regarding Defendants' legal compliance claims, and remanding for further proceedings.

On March 3, 2014, the United States Supreme Court granted the defendant's petition for writ of certiorari. On March 24, 2015, the Supreme Court issued its opinion. The Court vacated and remanded the Sixth Circuit's 2013 decision.

COMPANY INFORMATION:

Sector: Services
Industry: Retail (Drugs)
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: OCR
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: E.D. Kentucky
DOCKET #: 06-CV-00026
JUDGE: Hon. William O. Bertelsman
DATE FILED: 02/02/2006
CLASS PERIOD START: 08/03/2005
CLASS PERIOD END: 01/27/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Federman & Sherwood (Oklahoma City)
    120 North Robinson, Suite 2720, Federman & Sherwood (Oklahoma City), OK 73102
    405-235-1560 · wfederman@aol.com
  2. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  3. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    655 West Broadway, Suite 1900, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    619.231.1058 619.231.7423 ·
  4. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
  5. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  6. Smith & Smith LLP
    3070 Bristol Pike, Suite 112, Smith & Smith LLP, PA 19020
    215.638.4847 215.638.4867 ·
  7. Stephen J. O'Brien & Associates (Pittsburgh)
    71 McMurray Road, Suite 205, Stephen J. O'Brien & Associates (Pittsburgh), PA 15241
    412.833.5949 412.833.6002 ·
No Document Title Filing Date
COURT: E.D. Kentucky
DOCKET #: 06-CV-00026
JUDGE: Hon. William O. Bertelsman
DATE FILED: 07/14/2011
CLASS PERIOD START: 12/15/2005
CLASS PERIOD END: 02/02/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
No Document Title Filing Date
No Document Title Filing Date
No Document Title Filing Date