A federal court judge has refused to dismiss a securities fraud class-action lawsuit against Franklin, Tenn.-based Community Health Systems, according to Bloomberg Law.
The lawsuit alleges CHS misstated its financial position in documents provided to investors. In refusing to dismiss the action on Aug. 17, Judge Eli J. Richardson said the complaint adequately pleaded fraud, according to the report.
The for-profit hospital operator allegedly used unreasonable accounting practices to produce financial documents that were unlikely to trigger defaults. The question of whether the practices were actually unreasonable is a question for the jury, the judge said.
Read the Bloomberg Law article here.