Acadia Healthcare, Nine Directors Named in Securities Suit

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Acadia Healthcare Company, Inc., nine individual directors, and Citigroup Global Markets Inc. are facing a proposed class action alleging the defendants misled investors regarding Acadia’s business operations and financial prospects. Filed on behalf of anyone who purchased Acadia publicly traded securities between February 23, 2017 and October 24, 2017, the case alleges that during this period, the defendants made misleading statements that caused Acadia’s stock prices to become artificially inflated. In press releases and reports throughout 2017, the defendants allegedly touted the company’s positive performance and looked forward to promising financial results for that year.

In June 2017, Acadia reportedly announced it would be commencing a “continuous offering process” during which it would sell securities in various offerings. Acadia and underwriter Citigroup priced the offering in August 2017, according to the suit, and certain stockholders, including several of the individual defendants, purportedly sold 1.5 million shares of the company’s stock, which eventually were sold to the public, “for proceeds of over $76 million.”

In October 2017, the suit alleges, Acadia announced its financial results for the third quarter of 2017, revealing “a drastic shortfall in EBITDA for its U.K. facilities” and lowering its financial guidance for that year. Upon this news, the case claims, the company’s stock prices fell 26 percent, injuring stockholders who had purchased securities at an allegedly inflated price. The plaintiff argues that the defendants knew the company had missed its forecasts but continued to assure investors that promised results would be met, and caused financial injury to stockholders when the truth was eventually revealed.