HCA Holdings has entered into a preliminary agreement to pay $215 million to settle allegations the hospital giant concealed negative financial information from investors before its $4.35 billion initial public offering in March 2011.
HCA had a $30 IPO price, and by October 2011, when the shareholder lawsuit was filed, HCA's share price had fallen below $19.
In their lawsuit, the shareholders claimed HCA concealed unfavorable trends in Medicare and Medicaid revenue. The shareholders further alleged HCA accounted improperly for a 2006 reorganization and a 2010 restructuring.
Although HCA opposed the request for class certification in the case by arguing investors had many opportunities to learn more about HCA before purchasing their shares, a judge disagreed and certified the class in September 2014.
HCA also announced in a Securities and Exchange Commission filing on Wednesday that it reached preliminary agreements to settle three shareholder derivative cases, each of which is also related to the company's 2011 IPO.
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