Former Attorney General of Louisiana, Charles C. Foti, Esq. and the law firm of Kahn Swick & Foti, LLC ("KSF") announce the commencement of an investigation into Omnicare, Inc. ("Omnicare" or the "Company") (NYSE: OCR) to determine whether it has violated federal securities laws by issuing false and misleading statements to its shareholders.
On or about August 5, 2010, Omnicare investors learned that Omnicare's net income had fallen 60%, and that the Company would not be able to meet previously issued guidance.
Based on the huge disparity between defendants' prior guidance, the Company's past performance and the results announced by defendants that day, Omnicare stock plummeted - - falling over 10%, from a close of $25.26 per share on August 4, 2010, to approximately $22.50 per share the following day, on very high trading volume of over 13.35 million shares traded, compared to only 1.31 million shares traded the prior day.
In a WSJ.com article published August 8th, the site described Omnicare's corporate history under the guidance of CEO Joel Gemunder, who announced his retirement only days earlier. According to the WSJ:
"Mr. Gemunder, 71, had been in charge since 1981, but now he's split with one of the largest lump-sum pension payouts in history, The Wall Street Journal reported. He's getting a $91 million pension payout, plus severance, vesting of restricted stock and other goodies that bring his final payday to at least $130 million. And that's on top of the $14 million he bagged last year.
As CEO, Mr. Gemunder touted "cost reduction initiatives," including salary cuts for employees, but these initiatives didn't apply to himself.
And what did the shareholders get for their money? Omnicare shares took a tumble last week after the company reported a shocking drop in the number of prescriptions it fills.
Omnicare stock peaked in March 2006 at more than $61, but now trades under $23. That's a drop of more than 60% -- versus a roughly 11% decline in the S&P 500 during the same period.
And what did the taxpayers and customers get? Omnicare has long been plagued by huge litigation costs amid allegations of kickback and billing schemes."
If you have information that would assist KSF in its investigation, or would like to discuss your legal rights, you may, without obligation or cost to you, e-mail or call KSF Managing Partner, Lewis Kahn (lewis.kahn@ksfcounsel.com), toll free 1-866-467-1400, ext. 200, after hours via cell phone 504-301-7900, or KSF Director of Client Relations, Neil Rothstein, Esq. (neil.rothstein@ksfcounsel.com), toll free at 877-694-9510, or after hours via cell phone 330-860-4092. KSF attorneys have significant experience in representing both institutional and individual shareholders in securities fraud litigation nationwide. KSF encourages both institutional and individual purchasers of Omnicare to contact the firm to discuss the investigation.
For more information on KSF, please visit www.ksfcounsel.com.
Contacts:
Kahn Swick & Foti, LLC
Lewis Kahn, Esq., 866-467-1400, ext. 200
Cell:
504-301-7900