BioScrip Inc. (NASDAQ:BIOS) Further Gets Embroiled in Lawsuits

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Dallas, Texas 11/01/2013 (Financialstrend) – This small cap health care provider BioScrip Inc. (NASDAQ:BIOS) has a market cap of $455 million. Since September the company management and its board of directors have been embattled by lawsuits initiated by share holders and investigations launched by regulatory agencies.  The trouble can be traced back to the May 2012 when the firm reported selling its non core business of “specialty pharmacy mail operations and community retail pharmacy stores”. This transaction had attracted attention of civil investigation by “the United States Attorney’s Office for the Southern District of New York and a subpoena from the New York State Attorney General’s Medicaid Fraud Control Unit”.

The issue assumed dangerous proportions when BioScrip announced that it has received communication from the government that it is likely to hear from appropriate authorities with regards to the civil investigation. This announcement was followed by Bioscrip about its acquisition of CarePoint Partners Holdings LLC. The bought over firm is a leading provider of home based and alternate treatment facilities for patients who are suffering from debilitating and chronic illnesses like kidney failure and paralysis which requires daily medical attention regularly till the end of patients life.

In the run up to this take over and post the take over a slew of insider transaction occurred where by investors of BioScrip sold their stock holding in part or full. This prompted a host of existing share holders of the company to approach legal firms to institute legal suits alleging criminal intent on behalf of the management and the board in not keeping its share holders informed about the goings on in the firm. Specifically most of the complaints currently being pursued by various groups of share holders are seeking to claim fines on behalf of class of investors for the alleged “violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5”.

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